Most people who apply for Panama’s Pensionado Visa qualify based on a traditional pension or government benefit, such as Social Security, Veterans Affairs benefits, the Canada Pension Plan (CPP), or something similar.
But those aren’t the only options.
Panama’s Pensionado Visa can also allow an applicant to qualify based on a lifetime annuity from a private insurance company, provided the benefit meets the applicable requirements.
And we’ve worked with a number of clients who have done exactly that. Most of them have purchased annuities to stack on top of other benefits to reach the threshold to qualify for the Pensionado Visa. But we’ve also worked with clients to qualify for the Pensionado Visa exclusively based on lifetime annuity benefits.
The basic concept is pretty straightforward. But if you’re considering purchasing an annuity specifically to qualify for Panama residency, there are a few things you should understand before you buy the product.
The Annuity Really Needs to Be for Life
This is the big one.
The Pensionado Visa requires a qualifying lifetime benefit. So, an annuity that provides monthly payments but can ultimately be cancelled and cashed out—even subject to a hefty surrender penalty—may not check the “lifetime” box required for the residency application.
In other words, not every product with the word “annuity” in its name will necessarily work for the Pensionado Visa.
That’s why, if you’re shopping for an annuity specifically with Panama residency in mind, we recommend asking the insurance provider an important question before you commit:
What will the benefit verification letter say?
Ideally, ask the provider to send you a draft or sample of the letter they will ultimately be able to issue for your residency application.
The letter should clearly identify the monthly benefit and, importantly, confirm that the payments are guaranteed for your lifetime.
What Does the Benefit Letter Look Like?
When applying based on a private annuity, you’ll generally need a benefit verification letter similar to the letter you might otherwise receive from Social Security or another government pension administrator.
We’ve worked with clients who have successfully applied using lifetime annuities issued by Penn Mutual, MassMutual, and New York Life in the United States. We’ve also worked with clients who have successfully applied using lifetime annuities issued by Sun Life and Desjardins from Canada.
I’ll start by sharing a few examples that our US clients have
For example, here is an example of a letter that a number of our clients have used to qualify for the Pensionado Visa with a lifetime annuity from Penn Mutual.
This language has specifically been accepted as evidence of the required lifetime benefit.
In fact, Mr. John Norman, the gentleman whose name appears in the signature of that letter, is familiar with Panama’s Pensionado Visa and has worked with several of our clients to process these annuities. If you’re shopping around for an appropriate annuity product, it may be worth requesting a quote from him alongside any other providers you’re considering. You can reach him via email at: john@wealthcoordinationpartners.com.
We’ve also had clients apply using similar lifetime annuity products from MassMutual. Note that this letter offers even shorter, simpler language referencing that these are lifetime benefits:
We’ve worked with U.S. clients who have qualified based on lifetime annuities from New York Life. These letters have come in several different versions, and I’ll share one of them here:
Now, let’s see a couple of examples of annuity letters that our Canadian clients have provided. Here is an example from Sun Life:
Mr. Mike Bryce, whose name appears in the letter from Sun Life, is well aware of the requirements of Panama’s Pensionado Visa. His company Custom Group Services can be reached via email at info@customgroupservices.com.
Finally, we have worked with one Canadian client to qualify for the Pensionado Visa based on a lifetime annuity from Desjardins. Here is an example of what that benefit verification letter looked like:
Of course, these examples aren’t intended to suggest that you need to use one of these companies, or that every annuity product offered by these companies will qualify.
The product, and the language included in the letter matter more than which logo is at the top of the letter.
The important question is whether the particular annuity provides the required lifetime income and whether the provider can properly document that benefit for your Pensionado Visa application.
You’ll Need a Few Other Documents
There are a couple more things to keep in mind when your qualifying income comes from a private company rather than a government institution.
First, you’ll generally need to demonstrate that the company issuing the benefit actually exists, and give the immigration office sufficient assurance that it is a legitimate provider that is able to guarantee this type of annuity product. So, you’ll need to provide what we call a certificate of existence.
This specific document is going to vary a bit from one company to another, depending where it is registered and how it is regulated. Talk with your Panama immigration attorney about how to satisfy this requirement.
Second, you’ll generally need to provide at least one monthly bank statement showing the annuity benefit actually being deposited into your account.
Keep it Simple!
If you are applying based on something like Social Security, Canada Pension Plan, Old Age Securities, Veterans Affairs or Department of Defense benefits, then the application package is pretty straightforward. Most Panama immigration attorneys are well-aware of the requirements and what they should look like. And there are tons of expats who qualified for the Pensionado Visa this way.
But if you are applying based on a lifetime annuity from an insurance company, or actually any benefits from a private provider, then you are inevitably on a path less travelled. And our advise is to gather and prepare documents that tell a simple, easy to understand story.
For example, we don’t recommend submitting your entire annuity contract. This is going to cost a fortune to translate, and it may be more challenging for an immigration officer to understand. It also isn’t a strategy that we have seen specifically tested.
Instead, obtain a benefit verification letter from your provider that somewhat resembles a letter you’d receive from a government-sponsored program. It should include the basic information: the date, the name of the beneficiary, the amount of the net monthly entitlement, and the fact that it is a lifetime benefit.
The certificate of existence that you provide should make it clear for the immigration officer that this is a real company, in good standing, and in the business of providing and administering these types of benefits. The company name should be clearly identified.
The disbursement in the bank statement should also precisely match the amount reflected in the benefit verification letter. Don’t expect the Panama immigration officer to have to calculate taxes or other withholdings, or to make inferences or assumptions about how these documents fit together.
And ask your immigration attorney to provide guidance and feedback around the documents you are gathering and preparing.
Bottom Line?
Yes, you can potentially qualify for Panama’s Pensionado Visa using a lifetime annuity from a private insurance company.
But if you’re purchasing an annuity specifically because you want to qualify for Panama residency, don’t wait until after you’ve committed a substantial amount of money to find out whether the documentation will work.
Ask questions first. And, ideally, have your immigration attorney review the annuity terms and a sample of the benefit verification letter before you purchase the product.
We’ve worked with clients who have successfully qualified using lifetime annuities from several different insurance companies, and the sample documents included in this article should give you and your provider a pretty good idea of what you’re trying to accomplish.
Because in this case, qualifying for the Pensionado Visa isn’t just about buying an annuity.
It’s about buying the right kind of annuity—and being able to prove it.
If you have questions about applying for the Pensionado Visa with an annuity, then fill out a CONTACT FORM on our website, or email us at info@theindependentlawyer.com.
