Posted by For people who work and live in the United States for a long time, buying a house has become an indispensable part of life planning.Do you think everything will be fine if you buy a house?In fact, people who own real estate have more risks. They may face the problem of being unable to repay their loans or paying huge inheritance taxes.Today I will talk to you about the relationship between real estate investment and life insurance in the United States.Let's first take a look at what kind of people will buy a house in the United States?Let’s analyze why they need more configurationlife insurance.
The first category is ordinary households with mortgages.These people are generally ordinary people who came to the United States to work earlier. They may be small businesses or ordinary working-class people. They may have spent a long time making up the down payment for the house. They use their salary every month. Part to repay the loan.If an accident happens to the pillar of the family’s only support for the house and the loan cannot be repaid on schedule, the family will not only face the confiscation of the house by the bank, but daily life will be even more difficult.
The second category is new/old immigrants with certain savings and assets.These old immigrants may have come to the United States in the 80s and 90s and accumulated a certain amount of capital to invest in real estate. For example, the old immigrants living in Flushing and Brooklyn Eighth Avenue. They invested in American real estate in the early stage. I have multiple sets of real estate worth millions.What are their risks?
Let me give you an example. A grandmother in her sixties, with three children, owns three properties in the United States with total assets of 1000 million.So what is the problem facing this family? I believe you have guessed it, it is the problem of inheritance tax. In 2017, the personal inheritance tax allowance was 549 million, so the old lady’s assets of 451 million are subject to inheritance tax, and the federal inheritance tax rate is as high as 40%.After calculation, the old lady is expected to pay 180.4 million inheritance tax.After paying high taxes, there is another problem.How do the three children divide the three sets of properties with different values?
In the Chinese community, there are a lot of conflicts and disputes caused by the issue of real estate distribution, and there are even fierce fights between relatives.At this time, life insurance can play a more useful role.Take the old lady’s family as an example. If he can buy a sum assured of 550 million, he can plan the 550 million outside of the estate.After the old lady is a hundred years later, two million of the insurance claims can be used to pay inheritance taxes, and the remaining 350 million plus 1000 million of real estate can be shared equally among the three children.
The third category is foreigners who purchase properties in the United States (without U.S. status).Many wealthy foreigners own valuable real estate and other forms of assets in the United States, while foreigners only enjoy an inheritance tax exemption of $6 in the United States. The aforementioned personal inheritance tax exemption for Americans is 549 million. , This gap is not a little bit.
If domestic parents own a US$200 million real estate property in the United States, in case of misfortune, the portion of the inheritance tax for children studying in the United States is US$194 million. Calculated at the tax rate of 40%, the inheritance tax of nearly 80 must be paid. .In addition, please note that the estate tax must be paid within a certain period of time, which is within 9 months.In order to prevent accidental injuries from affecting the future lives of one's own family, life insurance as a hedging product is still very necessary for families with real estate.
Let’s give everyone a popular science on American life insurance.Several basic types of insurance :
1. Term (term life insurance):
The earliest and simplest type of insurance.As the name suggests, this type of insurance only covers a certain period of time, such as 10 years, 15 years, 20 years, and 30 years.For example, if you have taken out a 10-year insurance policy, and no accidents occurred within 10 years, it simply means that the person is still alive, and the money you paid cannot be taken back.If the insured passes away within the validity period, the insurance company pays the amount of insurance.After the insurance contract expires, the older the insured person is, the more expensive the insured amount will be.
Advantages: cheap premiums, but no cash value
Disadvantages: no savings and investment functions
2. Whole life:
A more traditional type of insurance, a classicPermanent life insurance.After buying this insurance, you will be protected for the rest of your life.After paying the fixed insurance cost, the remaining part of the premium you paid is converted into cash value.Insurance companies will regularly distribute dividends based on the company's profitability, but the payment and amount of dividends are not guaranteed.As time goes by, the cash value in insurance will increase, and after a few decades, it may reach a return of about 3%-4%.If the insured person wants to cancel the insurance in the first few years, he will suffer a loss.
Advantages: lifetime protection, cash value can be used
Disadvantages: low rate of return, the most expensive premium
3. Universal Life:
Universal insuranceThe most important feature is that its premium can be changed.You can adjust the amount of premiums according to your own situation, which is a more flexible insurance.Similar to whole life insurance, both are guaranteed for life.After paying the insurance cost, the premium will be invested in a separate account.Most universal insurance has a cash value, that is, the cost of the payment plus the profit minus the insurance fee and charges, which is the cash value.The income of universal insurance is generally linked to the interest rate market.
Advantages: variable premiums, more flexible
Disadvantages: uncontrollable, uncertain income
4. Variable Universal Life (investment type universal insurance):
Investment universal insurance, evolved from universal life insurance.The policyholder owns a number of separate accounts for investment and can invest in different mutual funds.Simply put, it means that the policyholder invests himself and is in his own hands.Therefore, this product has relatively high requirements for the policyholder's own investment level.If you are an investment expert, investment universal insurance may be a good choice.
Advantages: the investment project is controlled by yourself, the initiative is strong, and the income does not need to be taxed
Disadvantages: no guarantee, high investment level, high risk
5. Indexed Universal Life:
Index universal insurance can be said to be the latest type of insurance.Use the stock index for reference instead of directly investing in the index.The entire investment is still borne by the insurance company, and the upside of this kind of insurance policy is related to the increase in the index.The investment income of index life insurance is linked to the trend of several major indexes-the US S&P 500, Dow Jones Index, Nasdaq Index; Hong Kong Hang Seng Index; Germany 30DAX Index, etc.
Advantages: cash value preservation, relatively high income
Disadvantages: Uncertainty in tracking index trends and earnings.
These are the basic types of American life insurance, so what kind of insurance is suitable for which people?
It's time to focus!Come take a look!
For ordinary families with mortgages
If there is a mortgage that takes 30 years to repay, then at least one needs to buy a 30-yearTerm life insurance, That isTerm lifeInsurance.You can use the term life insurance online price comparison tool provided by American Life Insurance Guide to make a quotation.
If some people feel that they cannot afford the high premiums, they can also gradually reduce the premiums according to the loan amount of the house. This is the cheapest way to insure life insurance and can protect property ownership.For families with relatively ample budgets, it is hoped that there will be some accumulation of cash value. In this case, whole life insurance can be considered.For some young people with higher risk tolerance, choosing universal insurance and index universal insurance are also good choices.
For immigrants with multiple properties
The older people are, the more conservative they are when investing in insurance.Like the old lady we mentioned earlier, whole life insurance is a good choice for her.However, the premium for whole life insurance is so high that many people are unwilling to spend so much money.Here we will introduce another kind of protection universal insurance called the insurance policy will not lapse. The advantage is that the premium is very low, but the disadvantage is that the cash value is relatively small.
For foreign investors with high net worth income
The assets of these high-income groups may be relatively high, and insurance accounts for only a relatively small part of their assets.Therefore, for those who can bear high risks, index universal insurance is a better choice. Its investment function is also very powerful, and it is a very novel form of insurance.
Configuring life insurance is a wealth and life plan that property owners can consider. Purchase and choose insurance that suits them reasonably. At the same time, the earlier you plan, the more significant the benefits will be. Of course, each family has different circumstances and needs to consult professionals for more detailed planning.
(After this article is not original, it will be published after editing and finishing on this site)
