Foreign life insurance and annuity contracts

Product facts

Country

Multiple countries

Provider or product type

insurance

Local wrapper

An insurer-issued contract sold abroad that may be protection-only, whole-life, universal-life, endowment, investment-linked or unit-linked, an annuity, or a pension wrapper.

Risk tier

High

Last verified

2026-08-30

Reviewer

Chip Moreno

U.S. tax focus

abroad

Possible U.S. reporting channels

These are screening questions, not conclusions. Whether a form applies depends on your specific facts and the current instructions for the filing year.

• Form 8938
• FBAR (for a cash-value financial account)
• Form 8621 for underlying pooled investments
• Form 1040 and section 72 distribution schedules
• Form 720 / sections 4371–4373 where a foreign-insurer premium excise-tax question exists

Facts that can change the U.S. analysis

These facts matter more than the product name. Identify each one for the relevant year and preserve the document that supports it.

• The policy type and the five policy roles: owner, insured, beneficiary, premium payer, assignee
• Cash value and premium mechanics, including section 7702 testing
• Underlying separate accounts and fund ownership and control facts
• Premiums, withdrawals, surrenders, loans, assignments, and death benefits by year

Documents to gather

Start with the governing document, then add the annual statements. Keep the original record together with any translation.

• Policy contract, riders, and amendments
• Policy roles and role changes with dates
• Premiums by date and original currency
• Cash-value and surrender-value statements by year
• Underlying fund documents, including legal issuers and jurisdictions
• Transaction history: withdrawals, surrenders, loans, assignments, lapses, annuitizations, death benefits
• Investment-in-contract or basis records and prior inclusions
• Prior U.S. returns and any Forms 8621, 8938, FBARs, 3520, 3520-A, 720, and 1116
• Foreign tax and withholding statements and currency-conversion method

Common record gaps and translation needs

• Foreign-language contract and policy documents without translated summaries
• Missing surrender-value or cash-value schedules
• Unclear policy-role history (owner, insured, beneficiary, premium payer, assignee)
• Missing basis or investment-in-contract records for older policies

Unresolved questions

These questions stay open until the governing documents, holdings, and filing-year facts are reviewed.

• Does the contract receive U.S. life-insurance treatment under section 7702?
• Do the underlying funds create a PFIC (Form 8621) question?
• Are FBAR and Form 8938 reporting thresholds met for the policy's cash value?
• Did any transaction create income under section 72, and was basis or investment-in-contract preserved?

Official sources

Every record is indexed only with at least one directly relevant official local source and one applicable U.S. primary source. Confirm the current instructions and authorities for your filing year.

• U.S.IRC §7702
• U.S.IRC §101
• U.S.IRC §72
• U.S.IRC §1297 (PFIC tests)
• U.S.Instructions for Form 8621
• U.S.Instructions for Form 8938
• U.S.FinCEN FBAR line-item instructions
• U.S.IRS: Federal excise tax exemption program
• LocalEIOPA: Insurance and pension regulation
• LocalUK FCA: Consumer insurance