Who’s a Foreign National? Depends on who you ask!
In general, U.S. life insurance carriers consider non-U.S. citizens or Foreign Nationals to be someone who does not possess a Green Card or pass the substantial presence test who live, work, invest and do business in the U.S. The substantial presence test is met by residing in the U.S. for more than 31 days in a current calendar year and residing in the U.S. for more than 183 days over a three-year period*, including the current year. If an individual meets these criteria, they would be considered a U.S. Resident Alien.
An individual may have many reasons to avoid qualifying as a U.S. Resident Alien under the substantial presence test or to acquire a Green Card. Chief among these include a change in status for income taxes. As a U.S. Resident Alien, an individual’s income is generally subject to tax in the same manner as a U.S. citizen as all interest, dividends, wages and other forms for compensation including rental income and royalties must be reported on a U.S. tax return. This includes amounts earned both within and outside the U.S.