Financial Planning & Insurance for Americans Living Abroad

Moving abroad as an American opens a world of opportunity — but also a variety of financial planning questions.

How do you protect your income? What happens to your retirement accounts? Will your U.S. health insurance still cover you? And what about life insurance and estate planning?

When you move overseas, your financial responsibilities don’t stop at the border. In fact, they often become more complex. Insurance, taxes, investing, and long-term planning all take on new dimensions once you’re outside the U.S.

This guide provides an overview of what Americans living abroad need to know about insurance and financial protection, and how to ensure that your global lifestyle remains financially secure.

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Health Insurance for Expats

Healthcare might be cheaper—or even free—overseas, but that doesn’t mean you should go without insurance.

Depending on where you live and how long you plan to stay, your options may include:

• Local national healthcare systems:
  Many countries allow access through residency or employment. These systems can be affordable but may involve long wait times or coverage gaps, especially for non-citizens.
• Local private healthcare:
  Worth exploring and often required under visa conditions. However, these plans typically do not include medical evacuation or repatriation to the U.S. in an emergency.
• International private medical insurance:
  Designed for expatriates and frequent travelers, these plans provide global coverage, access to high-quality facilities, and the option to receive care in multiple countries. They’re ideal if you move often or spend time in several regions each year.
• U.S.-based health plans:
  Most U.S. plans—including ACA marketplace and employer-sponsored insurance—do not cover routine care overseas. They may only reimburse emergency care during short trips abroad. Don’t assume your coverage travels with you—confirm before you move.

When evaluating health insurance, look carefully at what’s included. Some policies exclude pre-existing conditions, maternity care, or mental health coverage. Others limit or exclude medical evacuation, repatriation, or treatment outside your country of residence.

A truly comprehensive international health policy is one of the most important investments an American expat can make.

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Beware of Insurance-Based Foreign Investments

One of the most common—and costly—mistakes Americans make abroad is purchasing foreign investment products wrapped in life insurance policies.

These structures, marketed heavily across Europe, Asia, and the Middle East as “tax-efficient” or “return” investments, often trigger U.S. tax complications.

In the eyes of the IRS, such policies usually qualify as Passive Foreign Investment Companies (PFICs). PFICs come with punitive U.S. tax treatment, potentially taxing you each year on unrealised gains and requiring the filing of Form 8621 for each investment annually. Missing these filings can lead to significant penalties.

 Foreign insurance-wrapped investment products, foreign mutual funds and some non-US pension schemes are rarely designed for US citizens. These products almost always create complex tax reporting obligationsStick with U.S.-compliant investment solutions and consult an expat-specialised adviser before committing to any foreign investment product.

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Life Insurance for Americans Living Abroad

The first step in evaluating life insurance is determining whether you actually need it.

• You probably need life insurance if you’re working abroad and have dependents—spouse, children, or others relying on your income.
• You may not need life insurance if you’re financially independent, retired, or single with no dependents.

If you do need coverage, term life insurance remains the simplest and most cost-effective choice.

However, obtaining coverage as an expat can be challenging—most U.S. insurers require you to be physically in the U.S. at the time of application and medical underwriting. If you’re planning a trip home, schedule your application during that period.

Be cautious with foreign life insurance policies, as they may not adhere to U.S. regulatory standards and may present difficulties or delays when processing claims.

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Income Protection and Disability Insurance

For many expats, income protection is a blind spot.

If you’re employed or self-employed overseas, most U.S. disability policies won’t cover you while abroad. Check the fine print carefully—especially if you rely on an employer-provided policy.

Consider sourcing expat-friendly disability coverage that offers “own-occupation” protection and worldwide portability. These policies can be harder to find and may require application before you leave the U.S., but they provide critical financial security if illness or injury prevents you from working.

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Where Insurance Meets Estate Planning

Insurance and estate planning intersect in several important ways.

For example:

• Life insurance proceeds may form part of your taxable estate, depending on policy ownership and structure.
• Beneficiary designations on retirement accounts or insurance policies may conflict with local inheritance laws in your country of residence.
• Powers of attorney and healthcare directives drawn up in one jurisdiction might not be valid in another.

As a U.S. citizen, you are always subject to U.S. estate and gift tax rules, even if you live abroad. In 2025, the federal estate tax exemption is $13.99 million per person. Estates exceeding this amount may be liable for significant U.S. taxes.

In addition, many countries have their own inheritance or succession taxes, and some—such as France, Spain, or Portugal—enforce forced heirship rules, which dictate how assets must be distributed.

If you hold assets or property in multiple countries, or have family spread across borders, seek legal advice from an attorney familiar with both U.S. and local law. You may require a U.S. will, a foreign will, or a cross-border trust to ensure your estate passes smoothly and tax-efficiently.

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Should You Keep One Foot in the U.S. Financial System?

Even if you plan to live abroad indefinitely, maintaining a U.S. financial foothold can be beneficial.

Advantages include:

• Keeping your U.S. credit score active.
• Maintaining access to U.S. investment and retirement accounts that accept expat clients.
• Avoiding higher fees or restrictions often applied to non-resident accounts abroad.

Check in advance that your U.S. banks, brokers, and insurers are comfortable maintaining your accounts once you’ve declared a foreign address.

Retaining a U.S. phone number or U.S. mailing address (via a trusted contact or service) can also simplify account authentication and compliance requirements.

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What About Long-Term Care Insurance?

Most U.S. long-term care (LTC) insurance policies will not pay for care received outside the United States.

If you expect to remain abroad permanently, you may prefer to self-fund future care costs, especially in countries with more affordable elder care.

If, however, you think you may return to the U.S., maintaining an LTC policy—or choosing a hybrid life-LTC product—can preserve flexibility and protect against high domestic care costs later in life.

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Final Thoughts: Build a Plan That Travels With You

Financial planning for Americans living abroad is inherently more complex than for those who stay stateside. Every key element—insurance, taxes, investments, and estate planning—requires an international lens.

You don’t need a perfect plan, just a coordinated one that protects your income, assets, and health across borders, while keeping you compliant with both U.S. and local laws.

The right professional advice can help you stay covered, compliant, and confident—so you can focus on making the most of your life abroad