Posted by Housing purchase restrictions, foreign exchange restrictions, stock market turmoil... In the face of domestic uncertainties one after another, more and more people, especially the domestic middle and upper class, have begun to pay attention to overseas asset allocation to ensure that their assets are not diluted .
In the past few years, buying an insurance policy in Hong Kong has become a popular investment and financial management method in China.Data released by the Hong Kong Insurance Regulatory Authority (Insurance Authority),In 2017, mainland visitorsNew policy premiums of HK$508 billion.
So, in the upsurge of following the trend that is sweeping the mainland, what should families who have already planned to immigrate to the United States consider when applying for insurance?So today, the editor will take you to compare the insurance differences between these three places.
Security in the insurance market
United States:
From the perspective of insurance history, American life insurance has a history of 260 years, and Hong Kong has a history of 170 years, while the insurance industry in the Mainland started late, only about 20 years.Therefore, in terms of monitoring, management, and law, American insurance is currently the most advanced and trustworthy in the world.Secondly, American insurance companies are regulated by the American Insurance Regulatory Commission, and the U.S. federal and various states have special funds to guarantee compensation.Government regulatory agencies require all insurance companies to participate in re-insurance (re-insurance), and use the premiums paid for reinsurance to establish a guarantee fund (Guarantee fund) in each state.If an insurance company does not do well, the reinsurance agency will appoint another insurance company to take over, and the guarantee fund will be responsible for the guarantee.
Hong Kong:
Hong Kong has always pursued liberalism and relied on industry self-discipline. The Hong Kong government dispatched actuaries appointed by the government to supervise the operation of the company from within to protect the interests of customers.The Hong Kong Insurance Regulatory Bureau, the only insurance company that can be restrained, has only truly begun to control the insurance industry in 2016.Therefore, in terms of management and control, Hong Kong insurance companies are still not as mature and sophisticated as the United States.
Mainland China:
Compared with the United States and Hong Kong, the insurance market in the Mainland started late, and the fierce intra-industry competition has also led to insurance becoming more and more like MLM.In life insurance, in particular, the business structure has been unbalanced, focusing on protection and wealth management. Therefore, the vast majority of people in China's life insurance market are still holding a wait-and-see attitude.
Insurance cost
In terms of premiums, I am afraid that no country can compete with the United States.In terms of similar insurance, the premiums in the United States are 1/3 that of Hong Kong and 1/6 that of the Mainland.
Avoid debt
For many wealthy people, one of the most important reasons to buy life insurance is to avoid debt problems.
In the Mainland, Hong Kong and the United States, the cash value of life insurance can be protected from lawsuits and enjoy judicial immunity.In other words, even if the insured goes bankrupt or goes to jail, others can't touch his insurance money.Even if it is a divorce, a large insurance policy will not be split.
However, it must be noted that in mainland China, once the parties initiate judicial immunity, 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.
Tax avoidance
When it comes to the most important point, I believe that no matter where the insurance is purchased, the most common point mentioned by the agency company is "tax avoidance".
Note: If you have assets in the U.S., or plan to buy a house in the U.S., immigrate to the U.S., or are already a U.S. citizen, you must choose Hong Kong and Mainland insurance carefully, because it not only cannot help you avoid taxes, but also pay more!
Many people are not aware of this when buying insurance. The US IRS stipulates that once American citizens and residents purchase overseas insurance, they are required to pay taxes on premiums.In other words, from the moment you become a resident of the United States, once you have paid premiums for overseas insurance policies (policies outside the United States), the IRS requires you to fill out quarterly forms and you need to pay taxes every quarter.
In addition, as an overseas financial asset, according to the FBAR clause, if the cash value exceeds 1 US dollars, a TDF90-22.1 declaration is required; if it is inadvertently under-reported, a fine of 1 US dollars will be fined. If it is deliberately not reported, a fine of at least 10 or 50% The cash value.
The taxes related to insurance are as follows:
Capital gains tax:
U.S. citizens or tax residents need to declare the income of the whole family in the previous year, including all foreign income.This means that the insurance purchased in the Mainland and Hong Kong generates income, which also needs to be declared and taxed.For high-income families, the tax rate may be as high as 39.6%.Therefore, blindly following the trend of buying insurance is not advisable.The reason why American insurance is able to avoid tax is that it is designed completely in accordance with the requirements of the IRS tax law, so that insurance can not only protect the income of customers, but also avoid tax payment perfectly.
Inheritance tax:
Although the mainland's inheritance tax is on the rise, for now, neither Hong Kong nor the mainland levy an inheritance tax. The US inheritance tax has been implemented for more than 100 years and has a set of strict regulations and procedures.Even if you are not an American, as long as you own assets in the United States, you still need to pay inheritance tax.The inheritance tax allowance for foreigners in the United States is only 6 yuan. Once a foreigner who owns assets in the United States passes away, all assets over 6 will be subject to inheritance tax. The tax rate is as high as 40%. Only after paying taxes and fees can inherit heritage.In other words, if you leave a house worth 100 million to your child, the child must first pay 40 to get the house.So whether you are optimistic about real estate investment in the United States or want to buy a house for your children studying abroad, you cannot ignore the issue of inheritance tax.Insurance itself cannot avoid inheritance tax, but it can reduce the impact of inheritance tax and allow children to get more assets.The most common practice is to set up an irrevocable trust + life insurance.
Overseas insurance tax:
Many people have ignored this point. The US IRS stipulates that once American citizens or residents purchase overseas insurance, they must pay taxes of 1-4% of the premium.In other words, from the moment you become a resident of the United States, the premiums of your overseas insurance policies are subject to tax.
Unrecognized insurance:
The United States has very strict regulations on insurance. One of the regulations of 7702 stipulates the maximum amount of money that the insured can put in for tax-free investment in a life insurance.Many insurances in Hong Kong have no limit on the amount. You can invest as much as you want.
This means that the money you put in is likely to far exceed the maximum value allowed by the IRS. Such an insurance cannot be regarded as insurance in the eyes of the IRS. It can only be called an investment. Then there is no way to talk about tax avoidance. The tax that should be paid is correspondingly not less than one cent. ?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????
So, if you plan to immigrate to the U.S. or have already immigrated to the U.S., how should you deal with insurance purchased in China or elsewhere?
Suggestion one:
If you plan to immigrate to the United States and have not purchased insurance from countries other than the United States (such as Hong Kong insurance, Singapore insurance, mainland China insurance), please do not purchase insurance from these countries for the time being, and consult your US tax accountant and US insurance agent After that, make a decision, because the insurance you buy must comply with US tax laws, otherwise it will bring yourself a lot of unnecessary trouble.
Recommendation XNUMX:
If you have immigrated to the United States and have purchased insurance from Hong Kong or China before then, it is recommended to reduce the insurance investment or suspend it as soon as possible.At the same time, it seeks professional advice on American law and accounting, and makes perfect family and business asset planning in order to comply with laws and regulations to avoid the expensive effects of immigration to the United States' global income.
Suggestion three:
If you have immigrated to the United States and have not yet purchased U.S. insurance, please consult an insurance broker to provide insurance protection for yourself and your family based on the actual situation.
Final Thoughts
Hong Kong insurance is a suitable choice for Hong Kong residents. If you want to purchase assets in the United States, immigrate to the United States or are already a U.S. citizen, choosing to purchase insurance in the United States is the safest and wisest choice.
Of course, U.S. insurance also has many complicated, good and bad situations. At this time, a professional and reliable agent becomes important to you. Only with sufficient professional understanding of U.S. insurance can you help customers better plan their assets and choose appropriate insurance. It also ensures the maximization of customer benefits.
