Posted by The insurance here is life insurance.As we all know, if you buy a house in the United States, you have to buy home insurance. In fact, the law does not require you to buy it. However, once an accident occurs in your house, such as a fire or someone else is injured in your house, in order to ensure that your real estate investment is not lost. , You should buy housing insurance.The same reason is for buying life insurance:Protect against risks.
So what are the specific risks for overseas investors buying houses in the United States?
1. The risk of inheritance tax
This is the biggest tax risk for overseas investors buying a house in the United States.The inheritance tax law uses domicile to determine whether a taxpayer is a tax resident, not as an immigrant, but based on the wishes and facts of domicile to determine whether or not a taxpayer is an inheritance tax resident.U.S. estate tax residents pay estate tax gift tax on global assets, but can enjoy a tax allowance of $549 million (2017).For non-U.S. estate tax residents, if the property is inherited by their children upon death,Only enjoy a tax allowance of 6 U.S. dollars, The remaining excess is subject to inheritance tax based on the property value at the time of death, and the tax rate can be as high as 40%.It should be noted that inheritance tax is different from income tax. Regardless of whether the value of the investment property increases, nearly 40% of the property value will be given to Uncle Sam free of charge. This may not be what every investor wants to see.
Life insurance is a natural weapon against inheritance tax.Because it happens to provide a large amount of liquidity such as death compensation when the owner of the house (the insured) passes away and faces a large tax burden, thereby offsetting the impact of inheritance tax.For non-U.S. estate tax residents, an additional benefit is that insurance compensation is not included in the estate, which will not lead to an increase in estate tax.And regardless of whether the heir is a U.S. resident or not, the remaining compensation after payment of the inheritance tax will not be included in the income of the year, and no income tax will be paid.
2. The risks of loans
Anyone who has bought a home loan in the United States knows that the bank requires you to buy home insurance, otherwise it will not lend you a loan.In addition, the bank will also recommend that you purchase mortgage insurance. This is actually a life insurance. The amount of your loan is used as the insured amount to ensure that in the event of an accident, the source of family income is interrupted, and the money you owe the bank is The insurance company came to pay it back.Banks are of course considering it from the perspective of protecting themselves, but for us, this risk is real.And what we need to consider is not just the loan amount. If you have underage children, there are also support, college tuition, and if you have a wife who is not working, you need to stay for several years of living expenses, etc., these items are added together. Is the total amount of insurance you need.
3. The risk of legal proceedings
Many Chinese like to invest money in real estate, and some properties are collecting rent, so they often become the target of some people with ulterior motives, and they are particularly vulnerable to lawsuits.Usually the plaintiff’s lawyers will carefully select their defendants. Once they find that the defendant has a property, the plaintiff’s lawyers will be happy to take the case.There is a saying in China called "preparing for a rainy day", which is quite right.In order to protect yourself in the lawsuit, you must prepare before the lawsuit comes.If someone has already filed a lawsuit against you, it will be too late to prepare.The cash value in life insurance is not subject to any lawsuits or creditors, and enjoys the protection of judicial immunity. Twenty years ago, there was a sensational Simpson case in the United States. Simpson won a criminal lawsuit and saved him from prison, but he lost a civil lawsuit and had to pay tens of millions of dollars in compensation. Almost all of Simpson’s property, house, land, etc. Bank deposits, stocks, and business must be compensated.But Simpson has a large life insurance, which is said to have a cash value of millions of dollars, and the money is safe.Simpson can take it out or borrow it for his own use instead of paying compensation.Therefore, having permanent life insurance is a major way for asset protection, and it is an unbreakable shield.
Therefore, the wealthy people in mainland China are trying to transfer their assets overseas to prevent accidents. They have chosen to purchase large-value life insurance in the United States. Investing a large amount of cash in insurance is because life insurance has judicial exemption protection. Features.Even if he is extradited back in the future, the cash value on the insurance cannot be taken away by others.
In addition to the risks lower than the above-mentioned risks, after more than 200 years of development, American insurance now has the most mature market and the most advanced products.With more than 800 life insurance companies in the United States, fierce market competition has made consumers the biggest winners.
In terms of premiums, in the United States, Mainland China, and Hong Kong to buy life insurance with the same insured amount, the United States’ premiums are only one-fifth of that of Mainland China and one-third of that of Hong Kong.In other words, to buy the same insurance, the money spent in mainland China is about five times that of the United States.
In terms of product types, the US market has investment insurance and index insurance that neither the mainland nor Hong Kong have yet.Among them, index insurance can follow the stock market index to obtain tax-free income and ensure that only profit is not lost, which has become the mainstream of the market.
In terms of policy terms, American insurance laws are all set up to protect the rights of policyholders. In the event of claims disputes, the degree of protection for customers is much greater than that in China.
In terms of service claims, the process is very simple, as long as you submit a death certificate and a death claim application form, you can apply for a claim.If you are a non-US citizen, 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.
statement:
This official account strives to ensure that the information provided is accurate, but does not guarantee the accuracy, completeness and timeliness of such information.All information and related products provided by this official account, regardless of their nature, should not be regarded as recommending, inducing or encouraging the public to buy or sell any shares, stock options, similar financial products or any other financial instruments.Regardless of how the user uses the information and related products provided by this official account, or makes any decision regarding the trading of shares, stock options and other similar financial products based on this information, the user must be solely responsible.Any information provided by this official account does not constitute investment advice for individuals, nor does it constitute any legal, accounting, tax or other professional advice.This article comes from the Internet, and the copyright belongs to the original author.If there is any infringement, please contact us and we will deal with it in time.
The content here is provided as general information only and should not be construed as a recommendation to buy or sell any security or financial instrument or to participate in any particular trading or investment strategy. All material presented herein is believed to be reliable but we make no representation as to or accepts any responsibility or liability for, the accuracy or completeness of the information contained herein or any decision made or action taken by you or any third party in reliance upon the data. The investments discussed here may be unsuitable for some investors depending on their specific investment objectives and financial position. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
