I’ve been talking quite a bit about US life insurance for foreign nationals lately. Without fail when I start working in a new niche and put it out there on this blog, it gets misinterpreted by a few.
I had a call this morning from a woman in Florida who wanted to get her Jamaican father life insurance. She either read one of my posts or was told by someone that there’s this guy who says he can write life insurance on Jamaican citizens living in Jamaica. What she didn’t read or wasn’t told is that there are criteria that have to be met for US life insurance companies to consider this type of business.
While it may not be the top priority, the business has to be profitable for the company. I explained in a previous post that on most term life insurance policies it takes a company 3-4 years to break even after underwriting and placement costs. That’s for an easy case right here in the US. When you add on the extra cost of underwriting internationally, procurement and sometimes translation of records, ensuring that financial statements are accurate and complying with anti-money laundering laws, a small case is a money losing proposition.
To quote one company’s guidelines on foreign national life insurance, “Consideration is extended only to high net worth individuals, business owners and professional individuals working in medical, engineering, scientific, technological, or similar fields and their immediate families.” It’s not a matter of these companies only wanting the big cases but rather the reality that they need to be not only larger cases but since each premium will be an international transaction, the stability and financial strength of the genre of clients described above is critical.
Bottom line. Do I think that’s fair? Absolutely. Why would a company open itself up to a market where they are going to lose money? So, sticking to the “consideration criteria” above is critical. They simply won’t consider the life insurance outside of those bounds.