Life Insurance for Foreign Nationals

People erroneously believe that life insurance is meant for a particular class of people. Some think you only need it if you have children or if you are very old. The truth is, life insurance serves different purposes for individuals. Its many benefits make it a fundamental personal finance plan for everyone irrespective of age or status.

The needs for life insurance for foreign nationals is best explained in two ways: why you need life insurance and why you should buy your life insurance in the U.S. rather than in your home country.

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Why Do Foreign Nationals Need Life Insurance?

As a foreign national, you need life insurance for the following reasons:

Financial Protection for Your Family

If you have family members who depend on you for their welfare and education, life insurance is a good way of securing their future. The lump sum paid as the death benefit of your policy by your insurer can provide a financial safety net for them if you pass away.

Protection for Your Business or Assets:

If you have property or a business in the United States, owning life insurance will help you protect your assets. As a business owner, life insurance can save your business from liquidation if you pass, provide you “key man/woman”: coverage as a business partner, and give you cash value which you can borrow from to keep your business afloat whenever the need arises. Apart from this, life insurance can be used to pay off estate taxes on your properties in the U.S.

Tax Benefits

Life insurance gives you tax advantages that you can find in other personal finance plans. The death benefits paid to your beneficiaries are both generally tax-free and considered exempt assets. Also, the withdrawals made from your cash value are usually tax-deferred.

Why Do Foreign Nationals Need Life Insurance?

As a foreign national, you need life insurance for the following reasons:

Financial Protection for Your Family

If you have family members who depend on you for their welfare and education, life insurance is a good way of securing their future. The lump sum paid as the death benefit of your policy by your insurer can provide a financial safety net for them if you pass away.

Tax Benefits

Life insurance gives you tax advantages that you can find in other personal finance plans. The death benefits paid to your beneficiaries are both generally tax-free and considered exempt assets. Also, the withdrawals made from your cash value are usually tax-deferred.

Protection for Your Business or Assets:

If you have property or a business in the United States, owning life insurance will help you protect your assets. As a business owner, life insurance can save your business from liquidation if you pass, provide you “key man/woman”: coverage as a business partner, and give you cash value which you can borrow from to keep your business afloat whenever the need arises. Apart from this, life insurance can be used to pay off estate taxes on your properties in the U.S.

Why You Should Buy Life Insurance Policy in the United States

One of the many questions asked by foreign nationals when it comes to life insurance is why should they buy from a company in the U.S. instead of their home country. While there is no law forcing you to buy your policy in the U.S., many foreign nationals settle for the U.S. for flexibility and affordability:

Life Insurance Flexibility in the U.S.

The U.S. life insurance market is one of the best regulated in the world. The insurance laws are structured to be customer-centered. Compared to many other countries, it is easier to get coverage and claim insurance benefits in the U.S. is more straightforward. The flexibility makes many foreign nationals choose the U.S. over their own countries when it comes to policy issuance.

Premium Amount

Juxtaposing premium cost of life insurance coverage in the U.S. and in many other countries will show that it is cheaper buying in the U.S. The premium amount versus the quality of coverage sets the U.S. insurance market above many other countries.

Accessibility

If you are a foreign national residing in the U.S. under a green card, it is advisable to buy your policy in the U.S. since you have your permanent residence here. Having a policy underwritten in the U.S. will help you greatly in your business or career pursuits. The proceeds from the policy can be used to meet both your short-term and long-term needs in the country.

Types of Life insurance Available to Foreign Nationals

The following are some of the types of policies you can choose from as a foreign national:

Term Life Insurance

Term life insurance is a type of policy which covers you for a specific period called a “term.” If you pass away while the policy is still active, your beneficiary, (usually your loved ones) will be paid the death benefit of the policy by your insurance company. The coverage period can be for anywhere between 5 to 30 years. However, if your chosen coverage term expires, you can decide to either keep the policy in force by continuing to pay the premium rate or buy another policy from your insurer.

Return of Premium Life Insurance

ROP life insurance also covers you for a specific term. However, unlike the traditional term life insurance, this policy guaranteed you a complete payback of your premium. It usually has a coverage term of 20–30 years. If you pass away during the term of the policy, your beneficiary will get the agreed death benefit. However, if the policy term ends while you are still alive, your insurer will calculate the total premium amount you have paid, and refund you in full. ROP is more expensive than the traditional term, but it is a perfect option for foreign nationals who can afford it.

Universal Life Insurance

Universal life insurance is also a type of permanent life insurance just like whole life. You can withdraw from the proceeds of your policy to meet different financial needs while still having a portion of it as death benefits for your loved ones. Universal life insurance coverage is more flexible than other types of permanent life insurance as it allows you to adjust the benefit and premium amount upward or downward.

Both universal and whole life policies are good for foreign nationals who desire long-term financial coverage. Though they are more expensive than term life insurance, the quality of coverage they offer is worth it.

Whole Life Insurance

Whole life insurance is a permanent life insurance policy that covers you for your entire life and provides both death and living benefits. This type of policy builds cash value over time, and the cash value can be borrowed to meet your financial needs.

What Should Foreign Nationals Look for When Buying Life Insurance?

The first thing is to determine your eligibility to own life insurance in the U.S. given your resident status, as not all statuses (such as visitor status) will allow it. Having done that, the following things are to be considered:

Determine How Much Life Insurance You Need

Life insurance needs vary widely among individual foreign nationals. Your resident status, amount of property in the U.S, and your family size are some of the factors you will need to consider before arriving at the amount of coverage to buy.

Choose the Right Insurance Company to Deal With

Before settling for an insurance company, you need to be sure you will get the best deal according to your needs. Choose a company that is reputable and provides you with flexible options.

Work with A Licensed Insurance Agent

Due to being a foreign national, dealing directly with your insurance company is rarely ideal. To ensure you don’t get less than what you deserve, you will need an insurance agent who will guide you and help you with the best life insurance policy for your status and needs.

Present Your Biography Information and Medical Report:

As a foreign national, your insurer will want you to present documents showing your date of birth, home country, visa validity period, and other information as deemed needed by the insurance company. Additionally, a medical report may be required before you can qualify for a policy. Most insurance companies require that the medical examination be done in the U.S.

How Gold Coast Life Insurance Can Help

You can get quality life insurance and at the same time save a lot of money on your policy if you buy from the right insurance company. We will help you get affordable and quality coverage that best suits your needs and guarantees adequate protection.

At Gold Coast Life Insurance, we are not selective of our clients based on their nationalities or health grounds. We accept high-risk applicants and those with pre-existing conditions. Getting a flexible life insurance policy from us is as simple as filling out this free quote.

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