by peaceyeh » Tue Sep 22, 2009 08:01 am
Hello all insurance expert!
I am urgently needing your advice.
My father purchased a life insurance policy for my mother 20 years ago and my mother recently passed away. We are not US citizen nor resident alien(green card holder) and currently living in Asia. My question is will IRS deducts tax from my mom's death benefit from the life insurance when insurance company wire transfer the money? I was told there is some kind of regulation as W-8BEN, can we avoid that and make sure to get the full amount of death benefit back? (I believe life insurance is non-taxable for US citizen and resident alien for sure which state in IRS website)
My email address is peaceyeh[at]hotmail.com and your kindly help with advice is truly appreciated.
Best Regards,
Michael Yeh
I am urgently needing your advice.
My father purchased a life insurance policy for my mother 20 years ago and my mother recently passed away. We are not US citizen nor resident alien(green card holder) and currently living in Asia. My question is will IRS deducts tax from my mom's death benefit from the life insurance when insurance company wire transfer the money? I was told there is some kind of regulation as W-8BEN, can we avoid that and make sure to get the full amount of death benefit back? (I believe life insurance is non-taxable for US citizen and resident alien for sure which state in IRS website)
My email address is peaceyeh[at]hotmail.com and your kindly help with advice is truly appreciated.
Best Regards,
Michael Yeh
Posted: Wed Sep 23, 2009 06:23 am Post Subject:
I think in the U.S. the actual benefit that life insurance offers is not taxable. But it's not the same with the interest that you earn by way of your insurance. That interest is taxable.
Posted: Wed Sep 23, 2009 03:52 pm Post Subject:
Hi Steven, thank you so much for your feedback and information. What you saying is what I have also heard as well. However, i can't find any back up documents to show that "life insurance death benefit is also non-taxable for non-US citizen or non-resident alien" and that's why worry me the most. Other than that, tax on interest is reasonable although i don't know how much that will be yet.
Thank you.
Posted: Fri Oct 02, 2009 09:24 pm Post Subject: non U.S. citizen
Have you already filed for the death benefit? I can't believe that a company wrote a policy on a non-citizen.I would like a little more info. on this please. Before I could comment, if you wish me to. Thanx
Posted: Sat Oct 03, 2009 07:30 am Post Subject:
Hi peaceyeh, did you consult with any life insurance agent in your place? It's a little bit difficult to comment on it, since you haven't even mentioned about which nation you're from.
Posted: Mon Oct 05, 2009 04:09 am Post Subject:
Here's a link for the IRS instructions on this:
http://www.irs.gov/pub/irs-pdf/iw8ben.pdf
It appears as if the death benefit itself is not taxable, but any interest paid will be subject to a 30% tax rate. The instructions are pretty clear, so I'd check it out and if you have any questions, speak with an accountant familiar with these things.
InsTeacher 8)
Posted: Mon Feb 22, 2010 10:19 pm Post Subject: INSURANCE
Where I am from they do not insure persons over the age of 70? I NEED A LIFE INSURANCE FOR SOMEONE OVER 70 THAT DOES NOT LIVE IN THE US? PLEASE PLEASE HELP
Posted: Tue Feb 23, 2010 01:03 am Post Subject:
Tell them to move to the US.
Posted: Tue Feb 23, 2010 01:50 am Post Subject:
It's possible to get coverage from a U.S. carrier for the person if they do not live in the U.S. They would most likely be required to come to the U.S. to sign paperwork.
Posted: Tue Feb 23, 2010 01:59 am Post Subject:
From what company? We tried to get someone who lives overseas coverage last year that would be signed for in the US (former US resident) and didn't find anyone willing to offer. They also won't take an APS from overseas.
Posted: Tue Feb 23, 2010 02:10 am Post Subject:
Depends on the country of origin. Last year a friend of mine at Guardian had an agent that wrote a policy on someone who lives in the UK. The stipulation was that client had to come to the US to sign paperwork. No idea how the medical underwriting was handled. I should also mention it wasn't a small case, that always helps.
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