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Business Building

Helping Foreign Nationals Protect Their Legacy

By
Chris Guerin

Why It Matters:

  • Foreign nationals are a growing demographic in the United States.
  • Helping your foreign national clients prepare for estate taxes may help them keep their legacy intact.
  • With over 20 years of foreign nationals market experience, Transamerica understands this customer.

Many foreign nationals who regularly visit, do business, or own property in this country may not be aware of the potential U.S. estate tax exposure they face. U.S. dollar-denominated life insurance can be used to help pay estate taxes and protect the quality of life for their family.

Navigating immigration

Despite this important client need, financial professionals may find that navigating the immigration labyrinth and understanding the differences between various visa types and employment authorization statuses can be daunting. We can help with that.

And while we do publish a comprehensive list of all visas/Employment Authorization Cards (EACs) and their risk statuses, there are so many designations, it can still feel overwhelming. It can help to segment them into more easily digestible buckets.

Visa guidelines

Fortunately, there is a much smaller subgroup of visas that we encounter most often in underwriting insurance. All of these visa types can be insurable up to best class, and all but the “B” visas can be eligible for our Chronic and Critical Illness Riders. Other less common visas may also be issued for Executive Exchange (L); Vocational (M); Science/Art (O); and Trade (TN/TD).

  • Investor (E)
  • Academic (F)
  • Work, including specialty occupations (H)
  • Fiancé/e (K)

Transamerica does not underwrite insurance on individuals with the following visa types: A, C, D, I, MC, S, T, TWOV, and U.

Employment Authorization Cards

Having a visa may get you into the country, but it doesn’t necessarily allow you to work here. This is where EACs enter the picture. Similar to visas, EACs have category codes that we can use for underwriting consideration. To determine eligibility, look at the category code located in the center of the card. A copy of the card is required with the application.

I-94 entry authorization

I-94 information is also vitally important. Applicants should be able to provide this information, but we also can check online during underwriting. Here again, the immigration process can be confusing — and inconsistent. First, a point of clarity: a visa does not, on its own, guarantee entry into the United States. However, once that entry is granted, an I-94 will be generated and will serve as the entry authorization when physically arriving in the United States.

The I-94 will track entry and exit dates. Many of you may have already encountered scenarios where an applicant has a valid visa, but the I-94 record shows they weren’t in the country during the dates of an application or exam.

The I-94 process isn’t flawless, so we do our best to make sense of the information we have. Transamerica takes into account the different ways a visa holder may be handled during entry. Sometimes they may be processed by a person; sometimes, especially during peak periods, they may be directed to an automated “kiosk.” I-94 accuracy or availability can vary depending on how an entrant is processed.

We also rely heavily on the agent’s foreign national statement document, attesting that all business was conducted in the U.S. while the proposed insured was physically present. Our examiners are also required to validate identification and presence when processing medical requirements. Together, these elements will usually be enough to confirm a proposed insured was in the country at the correct time(s).

Additional opportunities

So far we’ve talked about individuals with current U.S. visas. The reasons why one may, or may not, be able to produce a current visa vary: some may have overstayed their visa or EAC when it expired; others could have simply arrived here (often innocently, as children) without a visa.

It’s an important niche that can serve a vital purpose for hard-working, tax-paying individuals who can’t provide evidence of current immigration status. It can be especially useful if you’re prospecting a large family or business that may have a few individuals who may lack current visas. For example, individuals who can demonstrate long-standing residency and regular tax status with an ITIN and a tax transcript may be eligible for coverage.

Arming yourself with a solid, more simplified understanding of visa and EAC statuses will allow you to be more prepared when meeting with clients. It can circumvent problems and surprises for both of you as you work together to protect their legacy.

Discover more on how to help your foreign national clients keep their legacy intact.

Things to Consider:

  • There are many complexities involved in working with foreign nationals.
  • A foreign national’s type of visa or Employment Authorization Card lets you know if they’re eligible for underwriting consideration and optional riders.
  • Other key information you’ll need to know how to best help your clients include: country of origin, expiration and renewal dates, and I-94 records.

Life insurance products are issued by Transamerica Premier Life Insurance Company, Cedar Rapids, IA, Transamerica Life Insurance Company, Cedar Rapids, IA, or Transamerica Financial Life Insurance Company, Harrison, NY. Transamerica Financial Life Insurance Company is authorized to conduct business in New York. Transamerica Premier Life Insurance Company and Transamerica Life Insurance Company are authorized to conduct business in all other states. All products may not be available in all jurisdictions.

Neither Transamerica nor its agents or representatives may provide tax or legal advice.  Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal professionals regarding their particular situation and the concepts presented herein.
Transamerica Resources, Inc. is an Aegon company and is affiliated with various companies which include, but are not limited to, insurance companies and broker-dealers. Transamerica Resources, Inc. does not offer insurance products or securities. The information provided is for educational purposes only and should not be construed as insurance, securities, ERISA, tax, investment, legal, medical or financial advice or guidance. Please consult your personal independent professionals for answers to your specific questions.

 

Tags

Estate Planning
Taxes