US life insurance policy benefits for Non US Citizens / Non US residents

For high-net-worth individuals who have ties to the US, but are not US citizens or residents, a US life insurance policy may be a helpful solution to protect their families and preserve wealth for future generations, especially as these policies can help significantly with US estate and tax planning needs.

A US life Insurance Policy can Provide Many Benefits

  1. Estate and wealth preservation – can help provide protection for loved ones by offering liquidity to cover various debt obligations, including taxes, and overall can help to preserve wealth for generations to come.
  2. Income replacement – can be used to replace lost income should something happen to the high-income earner.
  3. Funding for business succession plans – for successful business owners, a properly structured buy-sell plan funded with life insurance can help with business succession needs.
  4. Liquidity for estate tax planning – depending on your US tax status, you may be subject to significant US estate taxes as well as taxes in your home country of citizenship/residence. A life insurance death benefit can provide needed liquidity to help cover your taxability. Care should be taken to understand the potential US estate tax exposure you may have – keep reading for more information.
  5. Exemption from US estate taxes: Life insurance is generally not considered US situs property, which means that a non-resident alien can own a US life insurance policy on their life without having the death benefit subject to estate taxes.

Are You Subject to US Estate Taxes?

The answer to this question depends on whether you are considered a “resident alien” or a “non-resident alien”.

Resident Alien Non-resident Alien
A resident alien is defined as an individual who is “domiciled” in the US at the time of death. The rules for determining domicile are complex, including time spent in the US and abroad, US visa status, and location of family and business interests. A non-resident alien is an individual who is not a US citizen or US national and is not domiciled in the US. It is essential that you work with tax counsel specializing in cross-border planning to help determine your status as either a resident or non-resident alien.
Resident aliens are subject to US estate taxes on their worldwide assets. Please note that there may be an offset to US taxes if estate or gift taxes are paid in a foreign country, depending on specific treaties. Resident aliens can also take advantage of certain US estate and gift tax exemptions and exclusions. For example, under the lifetime exemption, a resident alien can give away up to $12,920,000 (in 2023) during life or at death without incurring any US estate or gift tax. They can also gift $17,000 ($34,000 if married) annually to as many individuals as they like without paying any gift taxes. The lifetime exemption and annual exclusion are adjusted for inflation. Non-resident aliens: are only subject to estate tax on property that is considered to be a “US situs asset”. They can exempt up to $60,000 of US assets at death without being subject to US estate tax. Due to this low threshold amount (which is not adjusted for inflation), it will be important to discuss with your planning team whether assets you own are likely to be characterized as US situs assets.

Additional benefits of life insurance

A well-structured life insurance policy can also provide a number of other benefits, such as:

Protection and enhancement of the legacy for your loved ones: A life insurance policy can help ensure that your loved ones are financially secure after your death. The death benefit can be used to pay for their living expenses, education, and other needs.

Tax-deferred growth and tax-free death benefit in the US: The cash value of a life insurance policy can grow tax-deferred, which means that you will not have to pay taxes on the growth until you withdraw the money. The death benefit of a life insurance policy is also tax-free in the US, which can be a significant benefit for non-US citizens who are subject to estate taxes in their home country.

Can I obtain a US life insurance coverage?

High-net-worth non-US residents with a minimum net worth of $5 million may be eligible to purchase a US life insurance policy. However, there are other requirements that must be met, such as:

  1. You must have substantial financial or physical ties to the United States.
  2. You must have an existing US bank account.
  3. You must have a minimum of $200,000 or 25% of the coverage amount applied for in US assets that are directly titled to you or your US entity.
  4. All premiums must come directly from a US bank.

There are additional financial and medical underwriting considerations and other factors that will be evaluated to determine whether coverage is available in your specific case or not.


If you are a high-net-worth non-US citizen or resident, a US life insurance policy can be a valuable tool for protecting your family and preserving wealth for future generations. However, it is important to speak with an insurance professional to determine if you are eligible for a policy and to discuss your specific needs and goals.


This material does not constitute tax, legal, investment or accounting advice and is not intended for use by a taxpayer for the purposes of avoiding any IRS penalty. Comments on taxation are based on tax law current as of the time we produced the material.

All information and materials are not intended to be impartial advice or recommendations. Anyone interested in these transactions or topics may want to seek advice based on his or her particular circumstances from independent professionals.

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