In this article we will go over 5 common mistakes you want to avoid when getting life insurance for foreign nationals. A mistake can be very costly because not only it can cost you money, but also it can cost you getting denied for life insurance.
Life Insurance for Foreign Nationals
First of all, you may get life insurance for foreign nationals in the U.S. if there is a need for it. People that have a financial need in the United States can get life insurance. So here we provide you with a few examples of what determines financial need in the U.S.:
- Properties in the U.S.
- Investments in the U.S.
- Dependents in the U.S.
Determining if you need the life insurance is a different topic altogether. So let’s assume you need the life insurance and you are able to get it.
Our goal in this article is to help you avoid mistakes that can cost you in the long run:
1- Taking Any Company
There isn’t one company that will be the best for every situation. Obviously, you want to make sure you get the best price possible with the best company, but every company is different.
First of all, your price and rating will be based on your country of citizenship and residence. Also life insurance companies treat every country differently, so you need to request quotes from multiple companies to get the best price. When you get quotes, you will see that companies will offer you very different prices. In addition the insurance companies may restrict what type of life insurance they will offer to you.
2- Not Having All Paperwork Ready
In general life insurance companies are scared of risk. They also want to make sure that they don’t give life insurance to someone that has a high risk without them knowing it. That is the reason why they will request a lot of paperwork, so you have to be prepared from the beginning. Here is a list of documents you will need to provide:
- Property deeds in the U.S.
- Bank statements in the U.S.
- Investment statements
- Translated medical records from your country
- W8 form
- Copy of passport and visa
There may be more documents that you will need to submit, so be ready to communicate with your agent. Not having all the necessary documents will slow down the process.
3- Not Having Enough Time
You need to make sure you will have enough time while you are in the United States to finish all of the process. So be careful because getting life insurance takes about 4 weeks to get approved. Following our previous step should help you, and it will speed up the process.
We have helped foreign nationals in less than 3 weeks, but that is an exception not the rule. Also, we have seen clients that do not make a quick enough decision and are not able to get life insurance before they leave.
4- Term Is Not Possible
In general getting permanent insurance (Whole Life and Universal) is much easier for a foreign national, and getting Term insurance is harder. However, it is still possible to get Term insurance, if you apply with the right company.
In addition, if you can’t get Term insurance because of your country of citizenship/residence, then you can always use a Universal Life. This is a “trick” we have used in the past. The way a universal life policy works is it gives you a guaranteed period where your life insurance will not go up in price. Most of the time this guaranteed period is until age 95 or 100, however you can drop this guaranteed period to any age. So if you want a 20 year Term, then we can use a universal that has a 20 year guaranteed period, and it will work just like the Term insurance.
5- Using Any Agent
For U.S. citizen’s getting life insurance is very easy, and there are many great agencies that can help. However, getting life insurance for foreign nationals is much more complex, so you need to work with an expert. There are so many variables that will determine the best price and coverage (country of citizenship, country of residence, visa status, connections to the U.S., etc.). Therefore having experts will mean getting the best price for you or not getting life insurance at all.
Also, in order for you to get the best life insurance, you will need to work with a broker that has access to multiple carriers.
All of our listed mistakes happen because of lack of time, documentation, or knowledge from your life insurance agent. Prepare properly by avoiding common mistakes and you will increase your chances of getting life insurance. Also, to increase your chances make sure you work with experts if you want to get the best life insurance.