We never cease to be amazed by the way the pendulum of requirements swings for legitimate foreign national business owners who want to buy US life insurance. We get that the pendulum follows the US State Department’s feelings about the safety of countries, but that part of it seems to stay more stable than the issue of the foreign national’s ties to the US. One year life insurance companies will say all they have to do is apply for, take an exam and accept the life insurance policy in the US and the next year they want them to own a home here, have investments here that equal the amount of insurance they want or have a business here. And of course they have to have a checking account here.
Of course there is the question of why someone, let’s say, from South Africa or Brazil would want to buy their life insurance from a US company? Talking with a business man in South Africa recently he candidly shared that he could buy as much life insurance as he could in his home country, but there was a real problem with whether the company would stay in business, or whether they would keep the promises in the life insurance contract or, depending on their cash flow, whether they would pay a death benefit at all. He explained there it was rare for a SA life insurance company to pay the full death benefit and it was common for them to pay half or less or none at all.
There is no question that the best products and the best pricing for life insurance lie within the US borders and it is common for the products and pricing to be so significantly different that spending thousands to come to the US to purchase a policy makes perfect sense. And getting approved in foreign countries if you have health issues is nearly unheard of. What we commonly call impaired risk life insurance approvals is an automatic decline in most countries. So, there is incentive, especially for high net worth foreign national life insurance clients to gravitate toward the US when trying to structure their financial protection.
Life insurance companies on the friendly end of the pendulum are in a profitable zone while they stay there. Most of them will only sell permanent products and only to foreign customers with proven financial track records, so the profit is high and the retention is high. It’s a win/win situation for the company and business person. And if it’s a win for the company that makes it easier on all of us who live here because company profits are part of the determination of what rates we are charged.
So we say let’s at least make things consistent. It’s good for the US economy for foreign money to come here and pay premiums based on the US dollar. If it’s a consistent requirement, it’s a good thing to have foreign national buy up some empty homes here. Requiring a US bank account keeps money here. We aren’t advocating US companies wholesalers of life insurance for everyone in the world, but we whine about free trade or trade deficits and then make it totally burdensome to buy a hot US commodity, where’s the brains in that. If you have questions or need help reviewing foreign national life insurance options, call or email. We can help.
There are no comments on this entry.
There are no trackbacks on this entry.