Posted by Hong Kong is gone, can the other side of the ocean be far away?
Life insurance in Hong Kong has been selling hot in recent years.Some of the domestic middle class and above buy Hong Kong insurance, some of them feel that the price is cheaper than domestic ones, some of them are interested in its investment income, and some of them are interested in its critical illness insurance function.As everyone knows, American insurance far beyond the ocean has also begun to enter the domestic field of vision, and many high-net-worth individuals have also turned their attention to American insurance.Which one is better, Hong Kong insurance or American insurance?Let's look at the specific analysis of this article.
【hint】
The content of life insurance policies launched by various insurance companies is different. This article is to analyze the general direction. For actual details, please contact professional insurance agents for in-depth understanding.
Life insurance is not absolutely good or bad, only appropriate or inappropriate. It is recommended that partners and professional insurance agents have an in-depth understanding and find the most suitable choice according to their own conditions.
XNUMX. Premium
U.S. Life Insurance Wins!Cost-effective
With the same age and health status of the insured, and the same amount of insurance, if you compare Hong Kong's pure life insurance policy with the most traditional Whole Life in the United States, just look at the number of guarantees. The premium of Hong Kong insurance is 11.4% higher than that of the United States. And the cash value is less than half that of the United States.If you compare Hong Kong's investment (savings) insurance with the most advanced index-based universal insurance in the United States, it's a huge difference.The essence of insurance is "leverage", with the smallest amount of money in exchange for the largest death compensation.This kind of savings policy in Hong Kong is called the "101" policy, which means that you put 100 million in, and the person dies, only get back 101 million.However, American insurance starts from paying the first premium, even if it is only a few thousand yuan, unfortunately, after passing away in the first year, 100 million is left to the family.
The reason why American insurance is cost-effective is that the fierce competition among thousands of insurance companies in the United States, coupled with the advancement of medical care in North America, long average life, and relatively unobstructed investment environment and pipelines, make the cost of life insurance in the United States low, even one of the world's low.
XNUMX. History
U.S. Life Insurance Wins!The market is mature and stable
The United States has a history of nearly 1760 years since the first insurance policy was issued in the 260s. It is a very mature and stable market. Many insurance companies are established stores with a history of more than 100 years.The Hong Kong insurance market has a history of about 20 years, while the Chinese insurance market has only developed for more than 1992 years (since XNUMX).
XNUMX. Settlement of claims?
U.S. Life Insurance Wins!Simple, transparent and fast
U.S. life insurance is strictly reviewed and lenient in claims.In claim settlement, there will be no excuse for non-compensation or delay in claim settlement. Once there is a claim dispute, the majority of the legal benefits belong to the insured.The compensation procedures in the United States are relatively simple, as long as you submit a death certificate and a death claim application form, you can apply for compensation.Non-US citizens also only need to translate the death certificate into English notarization, and send it back to the insurance company together with the death claim form for compensation.On the other hand, because the insurance industry is relatively young in Asian countries, the claim settlement system is relatively unskilled. In addition to providing a lot of original materials for claim settlement applications, the phenomenon of refusal to settle claims often occurs.
XNUMX. Legal protection?
U.S. Life Insurance Wins!Perfect financial system
The U.S. insurance industry is strictly protected by U.S. laws, and each state has its own insurance laws. The supervision is very strict, and insurance companies are not allowed to falsely report the rate of return on insurance policies to get customers to buy.In contrast to Asian insurance, insurance supervision is relatively loose, and although Hong Kong insurance is mostly labeled "British XX" or "French XX" or other foreign insurance companies, the registration place of foreign insurance companies in Hong Kong is basically in the Cayman Islands or Bermuda area. Therefore, the Hong Kong insurance contract will be adjusted and protected by the law of the company's registration place.
XNUMX. Commodity selection?
U.S. Life Insurance Wins!More advanced
U.S. life insurance can combine death claims, cash investment, long-term care, and critical illness into one product. If you meet the conditions, you can also receive death claims (pre-mortem benefits) in advance.In additionThe United States also has investment universal life insurance and index universal life insurance that combine investment.
Hong Kong's life insurance products are actually very diversified, but in terms of capital-guaranteed indexed universal life (Indexed Universal Life, IUL), currently only the United States has it in the world.The dividend income of Hong Kong investment insurance is actually related to the direct investment income of insurance companies.Moreover, the company invests itself, saying that it earns more and less, investors really don’t know if it’s true.You will be given as much as you need.At the same time, investment returns are not guaranteed.In the U.S. Index Policy (IUL), simply put, investors’ money is not directly involved in the stock market, but insurance companies use the stock index as a reference to calculate the policy holder’s interest.andAll U.S. index policies are capital-protected-the index falls, and the cash value of the year will not decrease (but premiums will be deducted as usual).Generally, US insurance companies that do IUL products use the US S&P, Dow Jones Industrial Index, Nasdaq Index, European Blue Chip 50, Hong Kong Hang Seng and so on.The advantage of this calculation of interest is that it is open and transparent.People all over the world know how much the index has risen.
XNUMX. Taxation (income tax, inheritance tax, fat coffee clause)?
It depends on whether you are a U.S. citizen or have a green card.
The reason why life insurance in the United States is exempt from capital gains tax (withdrawing money in Loan's way) is exempt from income tax because it is a product under the Tax Code of the United States Internal Revenue Service.Simply put, life insurance in the United States, if you want to be tax-exempt, must go through Life Insurance Definitional Testing and Modifiled Endowment Contract testing.According to the age, gender, and amount of the insured, the highest limit of premium payment will be calculated. If this value is exceeded, the extra money will be taxed.Hong Kong and domestic insurance do not have such strict restrictions.
For Hong Kong life insurance, there is no need to pay any income tax or interest tax or value-added tax on the income of the policy. However, if the customer obtains a green card later, the value-added part of all overseas insurance will have to pay capital gains tax to the US government.
This is why in the United States, if you want to use insurance to deposit education funds for children, you should buy them for adults, not for children—because you cannot put money in your children’s insurance policies.If you can't let go of the money, naturally you won't be able to raise much money.What is the impact of this?If you have a green card, or if you plan to immigrate to the United States in the future, get a green card.Your Hong Kong insurance obviously does not meet the definition of life insurance defined by the US Internal Revenue Service, which will cause the value-added investment income of your life insurance purchase to be scrapped by Uncle Sam in the future.This problem does not exist for insurance in the United States.
Regarding the inheritance tax, Hong Kong does not need to levy inheritance tax since 2006, so there is no need to pay inheritance tax on claims.However, if the customer is a green card, the compensation will also be included in the inheritance and pay the US inheritance tax.In the United States, there is no need to pay inheritance tax as long as it is less than the allowance; if it exceeds the allowance, the estate tax can still be avoided by changing the policy owner or setting up a life insurance trust.If you need to pay the estate tax, you can also use the claim money to pay the estate tax.
Many people like to buy a house in the United States. If you are a foreigner, you will have to pay inheritance tax in the future when your assets in the United States exceed $6, and the tax rate is as high as 40%.Life insurance can effectively hedge this tax risk.In addition
There is no inheritance tax on foreigners’ U.S. life insurance claims.
XNUMX. Exemption clause and dispute period?
There is no difference between American life insurance and Hong Kong life insurance!First priority to protect policyholders
Both the U.S. and Hong Kong life insurance have a "two-year non-contestable" dispute period, which means that if the insured dies within two years of insuring, if the insurance company discovers evidence that the customer did not honestly inform or the insured committed suicide, the insurance company can Refuse to settle the claim.However, if it is discovered after more than two years, the insurance company cannot refuse to settle the claim.In addition, the two countries did not include irresistible natural forces in the exemption clauses (such as natural disasters such as earthquakes and floods).However, in most Asian countries, insurance policies will have a clause that "if the insurance policy involves fraud, it can be traced back to life", which often results in many disputes and slow claims.
(This article is excerpted from "Caixin Weekly")
