Posted by Hong Kong is gone, can the other side of the ocean be far away?
In recent years, life insurance in Hong Kong has been selling well.Some of the domestic middle-class and above buy Hong Kong insurance because the price is cheaper than that in China, some because of its investment income, and some because of its critical illness insurance function.As everyone knows, American insurance, which is far across the ocean, has also begun to enter the field of vision of domestic people, and many high-net-worth individuals have also set their sights on American insurance.Which one is better, Hong Kong insurance or American insurance?And look at the specific analysis of this article.
【hint】
The content of the life insurance policy launched by each insurance company is different. This article is based on the general direction for analysis. For actual details, please contact a professional insurance agent for in-depth understanding.
There is no absolute good or bad in life insurance, only suitable or inappropriate. It is recommended that partners and professional insurance agents have an in-depth understanding, and find the most suitable option according to your own situation.
XNUMX. Premium
American 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, and only look at the figures of the guarantee part, the premium of Hong Kong insurance is 11.4% more expensive than that of the United States. On the contrary, the cash value is less than half of that in the United States.If you compare Hong Kong investment (savings) insurance with the most advanced index universal insurance in the United States, the difference is even greater.The essence of insurance is "leverage", which means exchanging the smallest amount of money for the largest death compensation.This kind of savings policy in Hong Kong is called "101" policy, which means that if you put 100 million in it, if the person dies, you will only get back 101 million.American insurance starts from paying the first premium, even if it is only a few thousand yuan, if you die in the first year unfortunately, 100 million yuan will be left to your family.
The reason why American insurance is cost-effective is that there is fierce competition among thousands of insurance companies in the United States, coupled with medical progress in North America, long life expectancy, relatively smooth investment environment and pipelines, etc., making the cost of life insurance in the United States low, and it can even be said to be one of the best in the world. Low.
XNUMX. History
American 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 already a very mature and stable market. Many insurance companies are old 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. Claims?
American life insurance wins!Simple, transparent and fast
American life insurance is strictly audited and lenient in claim settlement.In terms of claim settlement, there will be no excuses to not pay or delay the claim settlement. Once there is a dispute over claim settlement, most of the legal interests belong to the policyholder.The claim settlement procedure in the United States is also relatively simple, as long as the death certificate and the death claim application form are submitted, the claim can be applied for.Non-U.S. citizens only need to translate the death certificate into English and send it back to the insurance company together with the death claim form for compensation.In contrast, Asian countries are relatively young in terms of insurance industry development, so their claim settlement systems are relatively unsophisticated. In addition to providing a lot of original documents for claim settlement applications, claims rejections often occur.
XNUMX. Legal protection?
American 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 policy rate of return to win customers to buy.In contrast to Asian insurance, the insurance supervision is relatively loose. Although Hong Kong insurance mostly uses "British XX" or "French XX" or other foreign-funded insurance companies, basically the local foreign-funded insurance companies in Hong Kong are registered in the Cayman Islands or Bermuda area. , so the Hong Kong insurance contract will be regulated and protected by the laws of the place where the company is registered.
XNUMX. Commodity selection?
American 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 conditions are met, death benefits can also be received in advance (benefits before death).alsoThe United States also has investment-type universal life insurance and index-type universal life insurance that combine investments.
Hong Kong’s life insurance products are actually very diverse, but in terms of principal-guaranteed indexed universal life insurance (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 the insurance company.Moreover, the company invests by itself, and it is really difficult for investors to know whether it is true or not.That's how much I give you at that time.At the same time, investment returns are not guaranteed.As for the index insurance policy (IUL) in the United States, simply put, the investor's money does not directly participate in the stock market, but the insurance company uses the stock index as a reference to calculate the interest on the policy for the policyholder.andAll U.S. index-type policies are principal-guaranteed-the index will fall, and the cash value will not decrease in the current year (but the premium will be deducted as usual).Generally, American insurance companies that make 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.How much the index has risen is known to people all over the world.
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 the form of Loan) is exempt from income tax because it is a product under the Tax Code of the US Internal Revenue Service.To put it simply, life insurance in the United States must pass the Life Insurance Definitional Testing and Modified Endowment Contract tests if it wants to be tax-free.According to the age, gender, and insured amount of the insured, a maximum limit of premium payment will be calculated. If the value exceeds this value, the extra money will be taxed.Hong Kong and domestic insurance do not have such strict restrictions.
Hong Kong life insurance, policy income part does not need to pay any income tax or interest tax or value-added tax, but if the customer gets 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 save education funds for children, you should buy it for adults, not for children-because children cannot put money in their insurance policies.If you can't release money, naturally you won't be able to raise much money.So 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.Then your Hong Kong insurance obviously does not meet the definition of life insurance by the US Internal Revenue Service, which will cause you to buy a part of the value-added investment income of life insurance, which will be scraped off by Uncle Sam in the future.However, insurance in the United States does not have this problem.
In terms of inheritance tax, Hong Kong has not levied inheritance tax since 2006, so the compensation is not subject to inheritance tax.However, if the client has a green card status, the compensation will also be included in the estate and pay the U.S. estate tax.In the United States, as long as the amount is less than the tax exemption, there is no need to pay inheritance tax; if it exceeds the tax exemption, you can still avoid inheritance tax by changing the policy owner or setting up a life insurance trust.If there is an estate tax to pay, the settlement can also be used to pay the estate tax.
Many people like to buy houses in the United States. If they are foreigners, they will have to pay inheritance tax when their assets in the United States exceed US$6 in the future, and the tax rate is as high as 40%.Allocating life insurance can effectively hedge this tax risk.in addition
There are no estate taxes on U.S. life insurance claims for foreigners.
XNUMX. What is the exemption clause and dispute period?
There is no difference between American life insurance and Hong Kong life insurance!Protect policyholders first priority
Both the life insurance in the United States and Hong Kong have a "two-year incontestable" dispute period, which means that if the policyholder dies within two years of the policy, if the insurance company finds evidence that the customer did not tell the truth or the policyholder commits suicide, the insurance company will Claims may be denied.However, if it is discovered after more than two years, the insurance company cannot refuse to settle the claim.In addition, the two countries have not included irresistible natural forces (such as earthquakes, floods and other natural disasters) in the exemption clause.However, in most Asian countries, the insurance policy will have a clause that "if the policy involves fraud, it can be retroactive for life", which often results in many disputes and slow claims.
(This article is excerpted from Caixin Weekly)
