Is It Hard For A Foreign National To Get US Life Insurance?

Over the years I have taken several runs at different ways to get life insurance from US companies for foreign nationals living in their home countries. I went through some dry runs with Sagicor and Pan American and found that, for the most part, the process was very stringent and the prices weren’t very competitive.

It’s just this year that I have been able to get down to the nitty gritty with some of the life insurance industry stalwarts and find out just what they will do, where their lines are drawn in the sand, and how to make a potentially cumbersome process fairly streamlined. This would be a good place to throw in a disclaimer of sorts. As much as US companies would like to be bringing in foreign dollars to our ailing economy, there are some countries and some risks that they would rather not entertain. So, the opportunity to own a US life insurance company policy is not available to everyone. Some cases take a different approach.

When I started digging into foreign national life insurance issues, it was clear that ‘simple’ wasn’t necessarily in the cards. For some foreign nationals just the fact that the life insurance application has to be completed and signed in the US and the exam has to be done while in the US are a little cumbersome. When you add on a mandatory return trip to sign for and pay for the policy, even if you are as close as Jamaica or Bermuda, the cost can be a factor. For those reasons alone, unless there is some reason that it just makes ultimate sense for a large policy to be purchased in the US, for the most part this appears that it will be mostly a local thing. The Caribbean, Mexico, Canada and some Central and South American countries are close enough to make this an interesting proposition.

Each company has its’ own requirements to further qualify if the business fits their parameters for foreign business. Some companies require a business relationship with a company in the US. Some don’t require a business relationship but there is at least some burden of proof to get past as to why they want a US policy rather than purchasing one in their own country. Some US life insurance companies insist that there is an active ownership in a US business, property ownership in the US, or that at least a certain percentage of the client’s investment assets are held in the US.

It seems, at least here in the local neighborhood, that Mexico has even more stringent requirements than many of our other neighbors. The following is pulled from the guidelines of one company I use. Note the difference between the average foreign country and Mexico. Application Requirements

All of that is simply to say that US life insurance companies are cautious about doing business in countries that are going through periods of instability which greatly impacts their foreign national life insurance criteria.

The other requirements seem pretty easily streamlined. A copy of your passport, not the whole thing, but the first page showing your photo and the fact that it is current is needed. A copy of your driver’s license and a copy of your national ID card are also needed. In some cases a US address for billing and a US bank account from which premiums are paid are required. Not huge obstacles, but important. You should be prepared to either provide those last two items or create them. There are plenty of mail forwarding services that can help with the US address or if you have a relative in the US that you can trust to forward bills and notices in a timely manner, that will work. A US bank account is something that can be opened easily enough when you are in country for the application and exam. Keep in mind that having funds transferred from your bank to the new one is probably the best idea. Opening up a bank account in the US these days with a large amount of cash is a little suspicious.

Acquisition of medical records is a critical component. My last client had all of her records copied and brought them with her when we met for the application and exam. There is no easy way to acquire medical records through our normal channels when they come from another country. So, a little planning goes a long way toward moving the process along. If they have to be translated into English, just know that’s part of the deal and get it done.

Bottom line. Hoops are there to jump through, but if there is value for a foreign national to have a US life insurance policy, it’s worth considering. If you have any questions about the process, please call or email me directly and let’s talk about ways we can make the road a little less bumpy.