Here’s my question about insurance, which also relates to estate tax. If this isn’t the right place for it, I apologize in advance.
I’ve been living in the U.S. for many years and will stay for a few more. I’ve built up savings in both my 401k and an investment account. I’m considering whole life insurance because I want a reliable policy that pays out cash, even if I leave the U.S. and end up living or passing away in another country. Another reason for looking at whole life insurance is to cover the U.S. federal estate tax (around 40% for non-residents) on my U.S.-based assets (401k and investment account) if I pass away.
I plan to let my 401k and investments grow, even after leaving the U.S., and want the insurance payout to cover the estate tax when the time comes.
Has anyone dealt with a similar situation or have any suggestions? My goal is to leave my savings to my kids without having 40% of it taken due to estate tax, just because I won’t be a U.S. resident anymore.
Again, apologies if this isn’t the right place for the question.
If your main goal for life insurance is to cover estate taxes, and you don’t care much about cash value growth, consider buying Guaranteed Universal Life (GUL) or another guaranteed product instead of traditional Whole Life.
GUL is usually much cheaper than Whole Life, so you can get a higher death benefit for a lower cost.
Not all insurance companies will cover you based on your Visa status, so you’ll need a good agent or broker to shop around with different carriers to find the best option before you officially apply.
This approach will save you time and effort from having to apply to multiple companies later.
That’s a common situation in Silicon Valley. Many engineers have a similar plan—retiring in their home country while keeping assets in the U.S. If you don’t have a green card or citizenship, you’ll face estate taxes if your U.S. assets exceed $60k. It’s best to look at the top 4 whole life insurance companies since they offer better international support.
Life insurance coverage generally applies internationally, so the policy will pay out if you pass away abroad. However, each carrier has different rules for verifying death. In most cases, payouts may be delayed compared to a death in the U.S. Some carriers have stricter procedures for confirming death, so it’s important to review their policies closely.
Some companies are more open to insuring foreign nationals than others. I am 15 years retired so can’t point them out but a good insurance representative with a Producer’s Group access to multiple companies and a practice that includes other foreign nationals will be able to get you properly directed.
There are plenty of good insurance carriers that will cover non-residents, including mutuals, F&G, and Foresters. The key with whole life is to get a fully underwritten participating whole life policy.
From my experience, I’ve had clients who secured life insurance while living in the U.S., knowing they would likely move abroad in the future. While I can’t speak for all carriers, we successfully got coverage with two companies. One was a top-rated mutual company known for having some of the best whole life contracts in the industry.