Foreign Nationals Using U.S. Life Insurance Policies

For affluent foreign nationals, there are significant advantages to purchasing U.S. life insurance policies. These individuals can often readily benefit from the maturity and therefore better rates and often higher quality products that are characteristic of the U.S. life insurance market.

These life insurance policies are exclusively for international high-net-worth clients who meet the following criteria:

  • Have no U.S. ties such as property ownership.
  • Have a need for large amount of life insurance, which is not available in his or her country of residence.

We find that there are two more benefits that are appealing to many wealthy foreign nationals. They are:

  • The life insurance policies are denominated in U.S. dollars and where distributions are currently exempt from U.S. tax withholdings on gains in the policy.
  • Concerned about confidentiality.

These life insurance policies are not applicable if the wealthy individual is a U.S. citizen or legal resident with a green card. They’re also inappropriate if the affluent non-U.S. citizen has financial U.S. ties such as real estate holdings, a US trust, bank accounts, and equity interests in private businesses.


A 35-year-old South American individual needs US$25 million to protect an income stream going to his family. He wants to pay for the life insurance policy quickly and needs the protection for as long as he lives. It would also be useful if he can have access to the cash value in U.S. dollars.

In this case, we structured a life insurance policy to be paid up in five years with the ability to build up significant cash value. Everything is denominated in U.S. dollars and the transaction is both transparent and confidential.

Circular 230 Disclosure:In compliance with requirements imposed by the IRS pursuant to IRS Circular 230, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used by anyone for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. The information contained in this document is not intended to and cannot be used by anyone to avoid IRS penalties. This material is intended for informational purposes only and should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney, tax advisor or plan provider.