The short answer
If you own a foreign-issued life insurance or annuity contract with a cash value, it is reportable for U.S. purposes. The IRS comparison of the two forms lists it as reported on both the FBAR and Form 8938, subject to each form's threshold. This often surprises people with savings-type policies (儲蓄險) bought in Taiwan, Hong Kong, or China.
The key words are "with a cash value." This guide does not treat every foreign insurance policy as reportable.
| Foreign policy | FBAR | Form 8938 |
|---|---|---|
| Life insurance or annuity contract with a cash value, issued by a foreign company | Reportable — an "other financial account" | Reportable — a specified foreign financial asset |
| Policy without a cash value | Not addressed in the official guidance reviewed here | Not addressed in the official guidance reviewed here |
Why a policy can be an "account"
The FBAR regulation includes in "other financial account" an account that is an insurance or annuity policy with a cash value. IRS guidance adds two practical points:
- The cash value of the policy is considered the account value.
- There need be no current payment of an income stream to trigger reporting.
How it fits into your FBAR
Add the policy's maximum value for the year to your other foreign accounts for the $10,000 aggregate test. If you must file, report the policy as one of your foreign financial accounts. See How the $10,000 rule really works and maximum account value.
Example
Wen, a U.S. resident, has a Taiwan bank account with a maximum value of $7,000 and a savings-type life insurance policy from a Taiwan insurer whose cash value was $9,000 during the year. The two together are $16,000, so Wen files an FBAR that includes both the bank account and the policy. Her foreign assets are below the Form 8938 threshold for her filing status.
This guide covers reporting. It does not cover how a foreign policy is taxed, how premiums, policy loans, surrender, or death benefits are treated, or whether a particular contract qualifies as life insurance under U.S. tax rules. Those questions depend on the specific contract — get professional advice, especially before surrendering or changing a policy.
Records to keep
- The policy contract and the insurer's name and address
- Annual statements showing the cash (surrender) value
- The exchange rate used to convert the value to U.S. dollars