Life insurance underwriting for foreign nationals
If you are a non-resident with significant ties to the US, you may be able to apply for US-based life insurance coverage. Here’s how the process works.
US citizens and permanent residents have access to a wide array of life insurance products in the United States, but options for temporary and non-resident foreign nationals are far more limited. However, if you have significant family and/or financial interests in the US, life insurance can provide an important source of financial protection, and you may be able to qualify for a policy. But before doing so, it helps to better understand the insurance application and underwriting process. This article can help by telling you about the following:
How the life insurance underwriting process works
Special considerations for non-residents with US assets
Things to expect when applying for coverage
What is life insurance underwriting?
Virtually anyone can apply for life insurance, but not everyone gets accepted. Insurance companies have highly-developed procedures — the underwriting process — to evaluate each applicant's risk profile and determine their eligibility for coverage, the amount of coverage they qualify for, and the premium rate they will pay. There are two key aspects to life insurance underwriting:
Medical underwriting
Those with longer life expectancy are obviously less risky to insure. Medical underwriting assesses this risk, typically by requiring the applicant to undergo a medical exam, including blood and urine tests. Insurers also ask for information to assess health and lifestyle factors that could impact that person’s life expectancy, including:
Age
Medical history and records
Family medical history
Height and weight
Tobacco and alcohol use
Hazardous hobbies or occupations
Financial underwriting
This part of the process ensures the applicant has an "insurable interest" and is not over-insured. This helps prevent abuse and fraud by making sure that the policy provides protection against financial loss, as opposed to an opportunity for others to reap financial gain from the policyholder's death. So insurers look at a variety of factors, including:
Income and assets
Existing life insurance coverage
Debts and liabilities
Credit history and score
Occupation and employment stability
Things insurance companies look at when underwriting foreign nationals
Residency status
Foreign nationals with permanent legal resident status in the US (i.e., green card holders) typically undergo the same type of underwriting process—and qualify for the same kinds of life insurance coverage—as US citizens, especially if they have lived and worked in the country for at least one year.
E, H1B, K and other temporary work and residency visa holders can get coverage in many cases but will likely face increased scrutiny from insurance company underwriters. Coverage options will vary depending on your visa type, duration, and the guidelines of the company issuing the policy. It’s essential to ensure that your visa is up to date and valid when applying for life insurance, and you’ll increase your chances of getting coverage if you can demonstrate all of the following:
A US bank account This is often a prerequisite for getting a policy because it demonstrates that you can pay premiums without the need for complicated international transfers.
Sufficient assets or income Life insurance carriers want to see that you will be able to pay your policy premiums.
A US address A residential address in the US is typically needed to obtain life insurance for both correspondence and legal requirements.
Social Security/Tax ID Insurers (and other financial services companies) often require a Social Security number or a Tax Identification Number (TIN) for administrative and tax reasons.
High-net-worth non-resident foreign nationals with significant business, financial, and family ties in the United States may also qualify for life insurance coverage. These policies are typically quite specialized, and designed to help internationals with personal and business interests in different countries manage their complex affairs (see "Special considerations for non-residents with US assets" below). Availability may be limited by your country of residence, and if coverage is offered, the underwriting process can be somewhat involved.
Health and medical history
Medical underwriting requirements can vary for foreign nationals compared to domestic residents. For example, insurers will likely want to evaluate the applicant's ability to access healthcare, especially in the case of non-residents, as well as exposure to health and risks not typically faced by US residents.
Financial stability and income
Assessing an applicant's financial situation, including income, assets, liabilities, and even ability to pay premiums, is often more complex for foreign nationals. This especially holds true for non-residents who are employed in another country and even temporary and permanent residents who hold significant assets abroad.
Mortality risks
When a foreign national applies for coverage, insurers will consider factors like the applicant's country of origin, travel patterns, and occupation (pilots, executives who travel to high-risk regions, politically exposed people, etc.) to assess their mortality risks.
Regulatory and legal considerations
Insurers must comply with regulations regarding insuring foreign nationals, which can vary by country and impact the underwriting process.
Special considerations for non-residents with US assets
While these foreign nationals face a number of unique challenges to getting a life insurance policy, it can be an invaluable tool for internationals with family and assets in the US. In addition to diversifying their financial portfolio, such policies can help solve the problem of transferring wealth to the next generation: While US residents enjoy a federal estate tax exemption of $12,920,000, the exemption for non-residents is limited to just $60,000. Non-resident life insurance can help bridge this disparity, because death benefit payments are exempt from federal estate taxes.
Guardian is one of a handful of providers that offers this kind of coverage through our Global Citizens program. Permanent, cash value life insurance policies up to a maximum of $30 million may be available to those who meet the following criteria:
A significant financial connection to the US For example, real estate or business ownership, equities, or other tangible and non-tangible assets, or direct family members who are US citizens Maximum coverage will be based on assets held in the US
The application must be completed and signed in the US
Other terms and conditions apply Additional items, documents, and records will be required during the application process.
The Global Citizens Program
Guardian provides specialized life insurance solutions and services designed to meet the unique demands of high-net-worth international clients. Our Global Citizens Program allows qualifying clients to tap into a dedicated team that specializes in the more complex financial protection needs of clients with multinational interests – and provides white-glove service with the backing of one of the world’s largest mutual life insurance companies. Clients must be non-resident, non-US citizens who demonstrate financial connections, holdings and/or family ties in the US. A dedicated case concierge team is assigned help each applicant, and submissions are evaluated by specialized underwriters. Other amenities include a complimentary US trust review, translation services, law firm referrals, and more.1 To learn more, contact a Guardian financial professional.
Things to expect when applying for US life insurance
As with any important financial product, you should start by doing a little research to help decide how much life insurance you need and the best kind of policy for your situation. Consider focusing on providers or programs such as the Guardian Global Citizens Program that specialize in providing policies to foreign nationals. Whatever kind of policy you end up getting, here are some things to keep in mind during the application process.
Gather relevant documents
As you start applying for coverage, it will help to have the following types of documents ready and available, depending on your specific situation. Any documentation from abroad must be provided as a certified translation into English:
Passport and visa documents
Proof of your residency or legal status in the US
SSN or Individual Taxpayer Identification Number (ITIN) (or W-8 form if you are not a US taxpayer)
Proof of US ties (e.g., property deed, employment contract)
Proof of income or assets
Expect a medical exam
In most cases you’ll need an actual medical exam; in others, you may just need to answer some health-related questions. You may also be asked to provide medical records. Again, if documents from your home country are acceptable, the insurance company will likely require a certified translation.
Allow time for the underwriting process after submitting your application
The insurance company may require you to be physically present in the United States when you sign the actual policy application form, and complete other requirements, such as a medical exam. Once you submit your application, the medical and financial underwriting process begins. The insurance company typically has to deal with more unknowns – compared to an application from a US citizen – so the process tends to be slower. Also, premiums for non-permanent residents are often higher due to perceived additional risks.
Paying premiums as coverage starts
Assuming the underwriting process is successful, your policy will be issued. Make certain that you understand all the terms and conditions of your policy as it is issued, especially those that relate to paying premiums. Many insurers (including Guardian) require that premiums be paid in US dollars from a US bank account. If overseas payments are accepted, make sure to account for transfer time and currency conversion fees to ensure full and timely payment of your premiums.
Get help finding the right life insurance solution for your situation
If you’re a foreign national with temporary US residency, a Guardian Financial Professional can help you explore the range of coverage options available to you. Or, if you’re a non-resident with ties to the US, ask about the Global Citizens Program.