The 4 advantages of buying American insurance, and the method for foreigners to buy American insurance (updated in December 2022)

Editor's note: Not long ago,American Life InsuranceThe editor of Guide.com received emails from enthusiastic readers.The reader previously purchased life insurance products from the Asia Hong Kong branch of a well-known international life insurance company, but through understanding, found that the advantages of domestic products in the United States are more obvious, hoping to understand how foreigners can apply for insuranceAmerican Life Insurance.Taking this opportunity, we take this article to talk about the four major advantages of buying American insurance and how foreigners buy American insurance.

The first advantage, tax relief for new immigrants to the United States

The U.S. IRS terms stipulate,American Life InsuranceIn the contract, interest income on cash value is exempt from capital gains tax, and death compensation is exempt from income tax.Therefore, if you want to find a natural tax avoidance tool for US green card and passport holders, life insurance is a very good choice.

When the deceased is insured and designated the beneficiary, after the death of the deceased, the death compensation left to the beneficiary is protected by law and will be included in the inheritance of the deceased.Compared with China Insurance and Hong Kong Insurance, the United States has very strict regulations on insurance.

According to the U.S. tax law, each life insurance policy has a capped premium amount, called MEC. Within this amount, the income generated by the policy investment will be exempt from benefit income tax.

If you put in a premium that is much more than the IRS maximum, your insurance is considered an investment vehicle, not a protection, and the cash appreciation portion of the policy will be taxed as a result.

If you applied for a dollar-denominated policy with a one-time payment prior to immigrating to the U.S., or obtaining a U.S. green card, you will facethis problem(Click to view).

The second advantage is for foreigners who have assets in the United States

Can foreigners buy U.S. insurance?The answer is yes.

However, the following conditions must be met:

There is a certain connection with the United States: For example,own property, company or certain assets (bank deposits, etc.).In this case, once you own real estate in the United States, if you inherit it in the United States in the future, you need to pay 40%U.S. estate tax, And the tax allowance is only 6 US dollars.

The US Revenue Service stipulates that: 9 months after the death of the deceased, he must report and pay taxes, otherwise he cannot inherit the assets.

At this time, life insurance products in the United States play a very critical role.

The heir can use the life insurance of the deceasedDeath compensation, To pay this partU.S. estate tax, To complete the purpose of wealth inheritance.America'sindex life insurance(IUL) with up to about 10 times thelever, you can get a high amount of insurance with a small amount of money, no matter whether the insured dies unexpectedly or naturally, the compensation will be paid, which is equivalent to using this product to reasonably avoid taxes.

The third advantage, jurisdiction exemption, American insurance may be able to effectively isolate you from business or marriage risks

In China, family finance and corporate finance are not separated, which is a common model adopted by many small and medium-sized enterprises.This is the meaning of the so-called "Prosperity and glory", and loss of all things.

However, such a model has considerable risks. In case of improper operation of the enterprise, or even bankruptcy, it will have great destructive power on the personal family finances.In addition, once married, there is a legal marriage relationship, and the property is shared.If you divorce, you will bear the risk of dividing your property.

American life insurance products effectively solve these problems.Because the cash value of American life insurance is exempt from the jurisdiction of other countries and regions.In other words, even if U.S. insurance policyholders in other countries go bankrupt, are collected debts or go to jail, anyone, due to jurisdictional issues, even a foreign government cannot directly access the money in the insurance account in the United States.

However, if the insurance policy is purchased in the Mainland, once the parties initiate judicial exemption, they must prove the innocence of the source of funds. If a criminal offence is involved, the court has the right to freeze, seize, and seal the insurance of the person involved.The large amount of insurance purchased in the United States is subject to the United States Insurance Law, and it is difficult for other people or countries to touch this part of the property.

However, it needs to be specifically stated that if a foreign couple settles in the United States and a lawsuit occurs in the United States, whether the cash value in the life insurance policy needs to be divided depends on the laws of each state and the circumstances of the specific case.

Regarding the divorce, and how the beneficiary should pay, please see "What is a policy'beneficiary'".

The fourth advantage is that the U.S. insurance is cheap and the U.S. insurance system is highly creditworthy

The life insurance industry is a mature and developed market in the United States. Full competition in the market brings the benefits of low cost and high service to policyholders.

The premium level in the United States is considered cheap worldwide. Under the same protection conditions, we have made special comparisons and found that when buying the same insurance in the United States, Mainland China, Hong Kong and Taiwan, the premium in the United States is only 1/of that in Mainland China. 5. 1/3 of Hong Kong and 1/2 of Taiwan.

The main clients of American life insurance are residents of North America, and medical care in North America is more advanced, with an average life expectancy of about 85 years, which is much longer than that of other parts of the world.The life table has the greatest impact on life insurance products that take death as a payment condition.The longer the life expectancy, the longer the insurance company’s compensation period, and the lower the cost of insurance.

There are nearly 1000 insurance companies in the United States, and many insurance companies have hundreds of years of operating history. It is rare to hear news about insurance companies’ refusal to claim compensation. Once a claim dispute occurs, US law often stands on the principle of maximizing the interests of consumers. On the other side, customer satisfaction is higher.And American insurance companies value credibility.When the insured person dies (except for suicide in the first two years of course), the insurance company will not deliberately make excuses for not paying compensation or deliberately delay.

In terms of exemption clauses, compared with domestic life insurance, American life insurance has a very big advantage.The U.S. insurance policy is strict in and out.Almost every policy contract will clearly indicate that the policy is several years oldDefendable period, Clearly indicate the exceptions for non-compensation, and with very few clauses (such as suicide within 2 years), and use the rule of reverse exclusion for compensation. This approach is very beneficial to the policyholder.In the case of force majeure such as war, some American insurance companies have clearly pointed out that they will be compensated.

Re-enter the outbreak in 2020New Coronary Pneumonia Outbreak, Is a typical "black swan" incident.Throughout the incident, the US insurance company's terms generally did not exclude the "global epidemic", and according to the principle of reverse compensation, compensation can be obtained.Mainstream insurance companies also publicly acknowledged this in this epidemic, which is commendable.

AboutWill the insurance company go bankrupt?, You can click to view this article dedicated to this issue.

How do foreigners buy American life insurance?

Insurance requirements for foreigners:

The insured must have a valid passport and visa to enter the United States legally (>Recommended reading:A guide for foreigners with 26 visa statuses to apply for U.S. insurance).
Foreigners must prove that they are related to the United States now or in the future, such as family and children in the United States, or business, or are applying for a green card. (>Recommended reading:What should foreigners pay attention to when buying American life insurance procedures and flowcharts?）
American Life InsuranceEditor’s note: As of July 2019, we have learned from the industry that evenHold a tourist visaIn the case of entry, as long asOwning real estate, company or bank issued a deposit certificate of $50 at the time of application,There are still very few American life insurance companies to provide underwriting.
Fill out the life insurance application form in the United States, the insurance company will arrange a commissioner to come to conduct a free physical examination (mainly blood draw, urine test and simple electrocardiogram, etc.).
When necessary, the insured should provide medical records of his country.

U.S. insurance companies that foreigners can insure (2022.8 update)

Global Atlantic (Accordia ) Temporarily withdraw from the foreign individual insurance market.

U.S. insurance companies that foreigners can insure (2022.1 update)

Remains unchanged, a health declaration form is required before the policy becomes effective.

U.S. insurance companies that foreigners can insure (2019.12 update)

Parents who are going to the U.S. to have children (first time to U.S., no real estate, 6-month deposit, tourist visa) usually apply Global Atlantic (Accordia )The release of water was stopped and the insurance requirements for foreigners were strictly enforced.

U.S. insurance companies that foreigners can insure (2019.11 update)

TransamericaIntroduced a new Whole Life savings-based dividend product, and allowed foreigners to insure, and removed the $100 million insured limit.

U.S. insurance companies that foreigners can insure (2019.07 update)

As of October 2018, there are many life insurance companies in the U.S. market that offer foreigners to purchase.Each company targetsRegulations on insurance policies provided by foreignersEach is different.

(2019.07 update) These common insurance companies include:Symetra.Allianz.National Life.Lincoln Life.Wow(Exited from the market in December 2018),Global Atlantic (Accordia ).Pacific Life, AIG(After changing the CEO, the review of foreigners is very strict),Transamerica.and so on.

If it can be proved that there is a very strong connection with the United States, such as a spouse, or holding an EAD for work, the underwriting process will be smoother.Among our readers, there are also successful cases of CPT status insurance.

At the same time, as the regulations of the US Immigration Service and insurance company underwriting regulations will be adjusted regularly, please stay tunedAmerican Life InsuranceUpdate of the guide network.Such as"What impact will the 2019 U.S. Immigration Reform Program have on applying for U.S. life insurance?"This article is an explanation of the latest trends in applying for U.S. insurance for the B1/B2, H1B, and F1 visa groups.

(Update November 2019:What are the new options for foreigners (non-US residents) to purchase US insurance in 2020?）

U.S. insurance companies that foreigners can insure require:

Most are limited toIULproduct
The sum assured is more than USD 100 million
Provide proof of work/income/assets

Update November 2019:Under $50, a variety of savings and dividend insurance products are developed for foreigners (non-US residents).

Foreigner status insurance process:

Open a U.S. bank account, minimum 10/3 months, recommended 50/6 months
Fully communicate with the broker, determine the intended product and insurance policy design plan, and prepare assets or related certification materials
Meet and realize the insurance company’s "U.S. Contact"Relevant requirements, for example: such as staying in the United States for more than 12 days in the past 15 months.
Sign and receive a medical examination in the U.S.
After the policy is approved, if it is not convenient for you to sign for it, you can consult a broker to set up other legal methods for signing the policy.

Payment method of premium:

The policyholder is required to open a checking account in a U.S. bank, and the policyholder writes a check every year to pay premiums

Claim procedure:

You can apply for compensation by submitting a death certificate and a death claim application form.
If you die in a non-US territory, you only need to translate the death certificate into English, notarize it, and send it back to the insurance company together with the death claim form for compensation.
The insurance company will then pay the beneficiary a dollar check, and the beneficiary can deposit it in the account anywhere in the world, and this insurance claim is completely tax-free.

For standard claims procedures, please see "What is a policy'beneficiary'".

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