Posted by The term “large insurance policy” is often used with “family office”, “global high-net-worth individuals”, and “Family trust"" and so on, appear and connect together. What exactly is a "large insurance policy"? What are the advantages of a "large insurance policy"?
The editor of American Life Insurance Guide ©️ invitedAIA InsuranceThe branch manager of the group, combined with the actual case and shared on Zhihu, made a simple, easy-to-understand and intuitive analysis of the "large insurance policy".The following is the edited specific sharing content:
What is a large insurance policy?
The literal interpretation of "large-value insurance policy" refers to a policy with a higher premium payment limit and a certain amount of premiums per item. The investment is stronger than the security, and it is an insurance policy that helps policyholders realize the role of "tax, debt, and inheritance".
insurGuru™️ Insurance Academy believes that “large insurance policy” means,A lifetime cash value life insurance policy with a sum assured of more than $800 million.
What is the straightforward explanation?Large-value insurance policies belong to the rich class, paying a lot of premiums to buy, can help them realize a variety of issues that the rich class only considers, some of the policy clauses can be customized with the insurance company, and the more premium the more willful the insurance policy .
Buying a large insurance policy is usually based on 6 purposes, or 6 major advantages:
1. Insurance is really tax avoidance
First of all, mainland China is a high taxation area. The current personal income tax, the inheritance tax and the real estate tax that are under consideration, and theGlobal taxation policy for Chinese residents, Will severely erode the assets of high-net-worth clients.The developed large-amount life insurance policy market in overseas countries and regions exists to solve the problems of wealth inheritance and high inheritance taxes faced by this group.This is one of the reasons why many high-net-worth clients love large-value insurance policies.
What are the advantages of overseas large-denomination insurance policies against the mainland in tax?
If you are an ordinary person, have medical insurance and social insurance, and low prices, as long as you don't back your mortgage, you can still have a happiness index.However, the wealthy class step by step to fight for their own world, the most concerned about the safety of their own assets.High-level business or workplace can handle all kinds of interpersonal, political and business relations with ease, but in my heart, I know the power of mainland policies and "relevant departments". As long as you are in mainland China, policies can instantly leave you with nothing.
Similarly, insurance in Mainland China is currently tax avoidance, but as long as the policy requires tax collection, all insurance companies in the Mainland will follow suit without exception. This is the reason why big bosses rarely buy large insurance policies in the Mainland, but In countries and regions with sound laws, you will not change as you say it is. Funds have their own security and high privacy. As long as they are not wanted internationally, your assets will always be your assets.
2. Debt is not that simple
Many insurance salespeople say: Insurance has nothing to do with debt, tax avoidance and debt avoidance... Obviously, this is just a rough look at the basic legal terms.Indeed, for example, this person’s company went bankrupt due to poor operations. Generally, mainland companies are limited liability companies. As long as the division of personal assets and company assets is clear and clear, there is no problem, insurance and debt are indeed irrelevant.
But in the actual implementation, who can guarantee that someone with a big family will not be found out by others? ?I personally experienced a case where an insurance company in the Mainland cooperated with the local court to check the assets and deal with the history of the corresponding insurance policy. Even if you buy it with your spouse or child, it is useless. As long as the assets are in the Mainland, there is always a way to deal with you. Let’s talk about important things. Once again, there is always a way to deal with you.
The biggest advantage of overseas large-value insurance policies is in execution.
The client’s overseas assets (such as insurance policies) can be ruled by the local court at a certain level, but they cannot be touched at all in actual operation. For example, insurance companies that come overseas with the rulings of the mainland local courts are ignored by the insurance companies. you.If you really want to enforce the ruling,Relevant local courts must apply step by step to the Supreme Court, requesting assistance from high courts and foreign affairs departments in overseas regions and assistance in execution, Unless it is a person who really committed a serious matter, it is impossible to operate, otherwise Jia XX is such a high-profile trust in the United States.
3. Enlarge personal assets and plan wealth inheritance
Previous specific case for a gentleman: here is called Mr. A, a partner, with a spare cash of about 300 million US dollars, and a one-time payment to purchase a large wealth inheritance insurance with an insured amount of more than 1000 million US dollars. .
That large amount of life insurance guarantees that as long as Mr. A passes away during his lifetime, the insurance company will compensate his family’s working capital of more than 1000 million U.S. dollars (the amount of compensation will also double over time), so when this policy takes effect, Mr. A It has used 300 million US dollars to win more than 1000 million US dollars of wealth, and manages the threat of inheritance taxes and debts.
4. Insurance policy loan, borrow chicken to lay eggs
Is this enough?Of course not enough. Another advantage of this type of large insurance policy is policy loans. Banks are most willing to lend money to the rich, and the rich are most willing to ask banks to borrow money.
After purchasing the insurance policy, Mr. A can take the insurance policy to a private bank for a policy mortgage loan. Generally, he can loan about 7% of the total premiums paid (in the case of 210 million US dollars), and the annual interest rate of the loan is 1.5- 3% (yes), the vast majority of this money, Mr. A himself can take it to make other investments and get a second return.
But if Mr. A is willing to leave the money in the private bank for the bank to help take care of, then the private bank is of course willing and has a good chance of giving another 210 million US dollars of reserve loan line to customers for investment, and the loan interest is also 1.5 -3% (requires that the client’s assets are in good condition), and then Mr. A entrusts private bank investment. At present, the private bank investment income on the market is stable at 8-10 points.Calculate the spread,With this loan of 420 million US dollars, we will get an annualized return of 5-6%.
Finally,I used $300 million to purchase an insurance policy with a compensation limit of more than $1000 million. At the same time, I spent $420 million in investment funds with an empty glove. You can get 5-6% returns every year. Do you like it?
(This illustration is for entertainment only and does not represent the views of the American Life Insurance Guide©️)
5. Insurance policy financing, increase the income while ensuring that the family has no worries about food and clothing
After talking about the gameplay of insurance policy loans, talk about the corresponding insurance policy financing.
For example, Mr. B, 45 years old, in the real estate industry, wants to use the 200 million US dollars on hand to purchase a large savings and dividend insurance policy, and pay dividends year by year after a certain year, so as to ensure that his family has a good life.
As we all know, generally buying dividend insurance, the income is relatively stable but not high (generally around 5% yield) because insurance companies need to do a good job of risk control, investment channels will be relatively cautious.But as mentioned above, financial institutions recognize customers, as long as you have money, I will lend you money.
Here, Mr. B uses his 200 million US dollars of principal to apply for a financing line from a private bank. If the assets are good, he can ask the bank to lend a principal of about 300 million US dollars, and the annual interest rate of the loan is 1.5-3% as usual.Then use this total of 500 million US dollars of funds to directly purchase a savings and dividend insurance policy, and the annual return is calculated at 5%.
We think that the principal is actually only 200 million, and there are 5 points of income, but the 300 million borrowed by the bank is because of the low interest environment today.There will be a spread of about 2-3.5% points per year to eat. If it is allocated to the principal of 200 million US dollars, a stable annualized rate of return of more than 7% can be achieved every year. As long as the interest is repaid on schedule, you can change it. Do you like it?
6. Many terms can be customized
This is really the most buggy one.
Normal policy clauses are set by the insurance company and signed by the customer, but large-sum policy customers can request the insurance company to add some clauses to make the policy a "trust" model.
Take the above case as an example. At the time of the contact, Mr. B was afraid that his children would disturb the policy, or that he would lose control of the policy when he was old, and asked to add a contract, stating that no one can withdraw the policy in one go. The insurance, and only from a fixed year, can you distribute cash to your family every year according to the proportion of the reservation to protect your life. In fact, it is a small trust. Finally, after the insurance company’s underwriting, legal, and risk control departments negotiated, they agreed to the customer’s requirements. .
insurGuru™️Insurance Academy Note: For large and super large insurance policies, some U.S. life insurance companies can customize insurance policies according to the needs of customers, and independently design an exclusive "life insurance" product for customers to realize the inheritance of family wealth .
Article summary
The six advantages shared in this article are the main purposes of customers who buy large-value insurance policies at the moment.From these advantages, we also shared some examples of the operation of large insurance policies.
In reality, "large insurance policies" are far more than the uses and advantages mentioned in the article.For policyholders, the American Life Insurance Guide Network©️ recommends that you first analyze your own actual needs, andProfessional insurance consultantUnder the cooperation of the company, we will carry out reasonable selection and design to find the most suitable configuration plan, so as to achieve the purpose of truly protecting the inheritance and value-added of family wealth.
