Life Insurance Options for Undocumented Immigrants: What You Need to Know

If you are an undocumented or illegal immigrant in the United States, you may find that nearly every process in your life is more difficult. You are ineligible for many programs, and others require you to provide information that could get you arrested and deported. In some ways, but not all, dealing with life insurance is part of that list.

Buying Life Insurance

There is no law that forbids an illegal alien from buying a life insurance policy on himself or anybody else in whom he has an insurable interest. However, many life insurance companies refuse to insure people with a criminal history. Because being an illegal immigrant is, in and of itself, a crime, your illegal status will prevent your life insurance application from being approved more often than not.

Employee Benefit Life Insurance

Employers frequently offer a group life insurance policy as a benefit to their employees. Group insurance works differently from personally purchased life insurance in that it is easier to qualify to be insured because the group contract usually requires the company to insure all members of the group regardless of their personal circumstances. Although this seems like it could be a good option, an illegal alien's status means she is often employed under circumstances that count as fraud -- a fraud that will invalidate the insurance contract once it's discovered.

Receiving Death Benefits

There are no laws that restrict who you can name as your beneficiary, which is the person who receives the death benefit upon your death. If you name an illegal immigrant as your beneficiary, the company is legally obligated to pay him the benefit upon your death. His legal status has no bearing on this point -- the company is even required to pay internationally if he returns to the country of his birth.

Immigration Law

Immigration agents spend their careers looking for and arresting illegal immigrants. If an illegal immigrant secures life insurance, immigration law can prevent his family from collecting on a policy obtained with fraudulent information. Even in the case of being the beneficiary of a life policy, the attention you receive as you fill out the paperwork might lead to the Immunigration and Naturalization Service's learning about your case.