A semiconductor device has an interposer frame having a die attach area. A uniform height insulating layer is formed over the interposer frame at corners of the die attach area. The insulating layer can be formed as rectangular or circular pillars at the corners of the die attach area. The insulating layer can also be formed in a central region of the die attach area. A semiconductor die has a plurality of bumps formed over an active surface of the semiconductor die. The bumps can have a non-fusible portion and fusible portion. The semiconductor die is mounted over the insulating layer which provides a uniform standoff distance between the semiconductor die and interposer frame. The bumps of the semiconductor die are bonded to the interposer frame. An encapsulant is deposited over the semiconductor die and interposer frame and between the semiconductor die and interposer frame.