Since the founding fathers of the United States signed the declaration of independence, immigration has been a hot topic. With current political debates surrounding illegal immigration and immigration reform, it is hard not to question what this all means for the average American Family. No matter what your personal position on immigration is, let’s take a look at how it is affecting the business industry: Specifically the Insurance industry.

According to the Henry J. Kaiser Family Foundation, 12.8 percent of the population in 2010 were immigrants. If immigrants compose such a large portion of our population, what is the process behind them receiving common amenities such as health insurance and life insurance? If an undocumented immigrant does not have a social security card, they can be granted a government identification card called an ITIN which will help them with banking, insurance, and security purchases.

Health Insurance

Health care reform is something that has been a hot topic in congress. Democrats typically perceive health care as a more social kind of platform that should be provided to people by the government. Whereas, Republicans primarily believe that individuals and companies should be responsible for health care. With all of the debate surrounding health care, where do immigrants stand?

Illegal immigrants are not legally allowed to purchase health insurance but their children who were born in the United States have access to government health care programs such as Medicaid, but it typically takes up to 5 years to even qualify for Medicaid.

Health care reform will allow illegal immigrants to obtain legal status at a faster rate which will allow them to pay taxes and contribute to organizations such as Medicaid and Medicare.

Life Insurance

A life insurance policy is a contract between an individual and an insurance company. In exchange for premium payments, the insurance company pays out a death benefit in the event of the insured individuals’ death. Death benefits from all types of life insurance are generally income tax-free.

With immigration reform, life insurance will still be available to illegal immigrants but at a perceivably faster rate. With the length of time decreasing for an illegal immigrant to obtain documented status, immigrants will be able to legally obtain life insurance at a faster rate.

Purchasing Life Insurance

Anybody who is either a legal or illegal documented citizen of the United States of America has the right and opportunity to purchase a life insurance plan. Purchasing life insurance within itself is not illegal for an undocumented immigrant. However, life insurance companies are liable to conduct a criminal background check and because overstaying a visa is considered illegal, it can be more difficult to obtain.

Receiving Death Benefit from Life Insurance Policies

In the case of a death, the granted beneficiaries of the life insurance policy are obligated by federal law to receive the allotted funds. However, government agencies such as ICE (immigration and customs enforcement) might make receiving the death benefit more difficult. Consulting a U.S. immigration lawyer is always a great way for undocumented immigrants to learn their rights. Even if the recipients leave the United States, insurance companies are still legally obligated to pay out the life insurance plan.

So what does this all mean to the average citizen? Well, in terms of life insurance policies, the affect might not be so great. However, it could contribute to lower health care rates as more people are getting insured, more health care providers being hired because of the higher demand for them, and more governmental funding for Medicare/Medicaid.

Annie Babbitt is putting her degrees in political science and philosophy to good use by applying to law school. She is currently working as a paralegal for an independent attorney in Boston. Annie loves helping promote change and being an advocate for those in need.

Richard Reich

CEO - Licensed Agent

Richard Reich CEO and Licensed agent

In my 20+ years as an independent life and disability insurance broker, I have personally assisted thousands of clients with their life and disability insurance needs.  Being independent, I represent many highly-rated insurance companies and, because I am not beholden to any one insurance company, my focus is to find the right company and policy for each individual client. I believe that when people shop for insurance (or anything else, for that matter) on the Internet, they are looking for a simple, non-intrusive, non-pressure method of doing so.  I strive to treat my prospective clients with the utmost respect and I believe an educated prospect can make the right decision without sales pressure. Please feel free to contact me at your convenience.