What should I expect as a foreign national applying for U.S. life insurance?

When talking with your advisor about incorporating life insurance into your financial plan, you’ll want to be sure he or she is working with a life insurance professional and insurance carrier that understands and, preferably, specializes in the international insurance business and the underwriting of international clients.

A number of logistical pitfalls must be understood and navigated, including:

01 You must be willing to travel to or stay in the United States during the process. Most reputable U.S.-domiciled insurers require that all applications, exams and solicitations (even e-mails and faxes) occur while you, the proposed insured, are in the United States. Your life insurance professional and advisor should have available all necessary and correct forms the next time you are here. If you leave before completion of the sales process (delivery of the policy), any missing forms will require your return.

02 Some insurance companies allow the proposed insured to sign a limited power of attorney (PoA) in connection with the policy’s delivery. Consider setting this up proactively in case an anticipated return to the United States is interrupted, or you need to leave the country unexpectedly. Under a PoA, a U.S.-based designee (an attorney in fact) can help resolve delivery requirements if you are unavailable due to unforeseen circumstances.

03 The international underwriting review looks at three components: your legal residency, your travel destinations (including duration and frequency) and your citizenship or nationality. Travel to some countries is not insurable due to risks in those regions. Also, a country’s insurance laws may preclude insurability by a U.S. carrier that is not authorized in the residency country. Furthermore, travel destinations need careful review to assess (similar to residency, but shorter-term) any exposure to those same hazardous conditions. Finally, some countries have laws that prohibit their citizens from obtaining foreign life insurance coverage. You’ll want to verify that your life insurance professional understands these nuances as they pertain to your situation and that you accurately share this information. Doing so can help to ensure a smooth application and underwriting process.

04 You must give your life insurance professional details about your medical history. Foreign travel or residency can heighten medical vulnerabilities that would otherwise be more easily addressed in the United States and other countries with high standards of medical care.

05 You must provide the same level of detail pertaining to your financial history, especially if you have worldwide assets. U.S. financial allowances are based, in part, on an individual’s projected estate-tax liability, but for individuals not exposed to U.S. estate tax, it may be more challenging to justify the amounts being applied for.

As mentioned, you should get to know your life insurance professional, and be as selective as you would deciding on your attorney, tax advisor or primary care physician. Then, allow this professional to learn your specific needs and situation. He or she will then work with the insurance carrier, as questions arise, without having to go back to you several times for clarification.

The more information you provide, the smoother the process can be. And where there are gray areas, it will be helpful to have a life insurance professional that you trust, who has a solid understanding of the international insurance market and a trust-based relationship with the carriers. That is the best way to ensure your application is submitted with all necessary information from the start. Thereby, the process can be hassle free and should result in the best applicable underwriting class and associated premiums for you.

Originally published in Worth, December/Janury 2016

Transamerica Life Insurance Company and its agents and representatives do not give tax or legal advice. This material and the concepts presented here are for information purposes only and should not be construed as tax or legal advice. Any tax and/or legal advice you may require or rely on regarding this material should be based on your particular circumstances and should be obtained from an independent professional advisor.