As of mid-2022, more than 46 million foreign-born individuals resided in the U.S., according to the Center for Immigration Studies. That means that life insurance agents may be sitting on top of a goldmine: the high net-worth foreign national market.

Many of these individuals are attracted to the U.S. life insurance sector due to the higher death benefits available and lower cost of insurance compared to many other countries. However, this market is not for the faint of heart. Agents must be willing to put in the work to overcome a maze of U.S. and foreign regulations, as well as logistical hurdles, to get foreign national clients approved and the policy funded.

However, for those willing to put in the work, the door is opening wider as American insurers are generally lowering requirements for foreign national coverage, with multiple carriers such as Allianz, The Guardian and Symetra offering programs for foreign national coverage.

The intricacies of dealing with high net-worth foreign nationals—who may have assets, businesses and family ties spread across multiple countries—demand a deep understanding of the client's financial landscape and an ability to communicate effectively across cultural divides.

Antonio Gastélum, a partner in the law firm MEG International Counsel, highlighted the appeal of the U.S. market during an interview with Wealth Management. “Life insurance products in Mexico can cost twice as much and offer a fraction of the total death benefit as U.S. policies," he said. “When a Mexican is seeking significant coverage, it makes sense to turn to the U.S. market, especially if domestic products cannot meet their needs."

Success in this domain requires more than just understanding the market, though. It demands a holistic approach that includes developing expertise in international tax law, investing in cultural competency and potentially learning a foreign language.

Agents must also navigate the practical challenges of policy ownership, fund origination, and the potential tax implications of policies funded as modified endowment contracts (MECs), which could see a large withholding by the U.S. carrier for income tax if surrendered.

Still, the trend toward easing coverage requirements for foreign nationals by U.S. insurers represents a significant opportunity for life insurance agents. To thrive, agents must be willing to engage with the complexity of the high net-worth foreign national market—from understanding the nuanced needs of individuals with ties to the U.S. through residence, real estate, tax liability or business ownership to addressing the unique concerns and options of high net-worth non-resident aliens with business and family interests across borders.

For agents eager to tap into this market, the first steps involve educating themselves on the diverse needs and challenges of high net-worth foreign nationals, building a network of in-country advisers and partnering with insurers who offer tailored products for this demographic.

With the right approach, agents can unlock the potential of the high net-worth foreign national market, providing valuable services to a clientele that is both underserved and highly lucrative.

Rhea Wessel is an American writer based in Kronberg, Germany. Her company, the Institute for Thought Leadership, trains subject-matter experts in writing.