FBAR reporting on life insurance policy (life insured but non-owner)

happyB · Post by **happyB** » Fri Jun 01, 2018 12:13 am

Hello,
I am a resident in the US. My mother in India owns a life insurance policy. She pays the premiums and is the beneficiary, and the policy is linked to her savings account from where the premiums are deducted. I am mentioned as the life insured on that policy. Other than this I don't have any financial interest or authority in that policy. I was wondering whether I would have to mention this policy on my FBAR reporting form. Thanks

RAJESH H DHRUVA · Post by **RAJESH H DHRUVA** » Fri Jun 01, 2018 1:38 am

Dear happyB

1. Being insured You if you have signed the applications then You have signature authority and therefor the same is to be reported under FBAR.

2. If you have not signed the applications then your mother who is a Resident in India has taken
The Policy where you have no signature authority nor you have made any investment so there is no liability under US laws.

3. However per Indian rules in most probability the Policy is issued to You based on Your signed application.

4. If the Policy is Unit linked the same will be covered under PFIC too.
Best wishes

RAJESH H DHRUVA
femaonline.com

happyB · Post by **happyB** » Fri Jun 01, 2018 1:55 am

Thanks a lot for that information. I will be reporting it under FBAR as I have signed it to be the life insured. However, since I am not the beneficiary nor the owner, do you know whether I am liable for any taxes in the US when the policy matures?

RAJESH H DHRUVA · Post by **RAJESH H DHRUVA** » Sat Jun 02, 2018 12:50 pm

Dear happyB

1. Principally the Policy is owned by You.

2. You have made your Mom a Nominee or Beneficiary.

3. So the maturity proceeds will be deposited in your account or Your Mom 'a account as per your instructions .

4. In either case the Policy profits are yours.

5. Premiums paid by Your Mom amounts to gifts made by her to You.

6. This is a reply based on assumptions . Factual reply can be provided after examination of Policy papers and related facts.

Best wishes
RAJESH H DHRUVA
femaonline.com