What are the advantages of U.S. insurance?
The most important factors include:
1. U.S. insurance companies are reputable. They will definitely pay for death (except for suicide in the first two years), and there has never been an insurance company in the U.S. that makes excuses not to pay or deliberately delays claims. U.S. insurance will pay for drug deaths, natural disasters, war, drunk driving, and even force majeure.
2. The life insurance industry in the United States is a mature and developed market, and premiums are among the cheapest in the world. For example, a 35-year-old woman can get a large policy of up to $1,000,000 for 10 years at a cost of $10,000 per year, a high leverage of 10 times that is not possible with ordinary insurance.
3. Universal life insurance in the U.S. can quickly help U.S. immigrants build their personal business reputation in the U.S. (facilitating applications for credit cards, loans, etc.). Moreover, the policy itself is a valuable security and can be pledged for a loan from the insurance company. This loan process is far easier than a bank loan, and the loan rate is favorable.
There are many other benefits for foreigners to buy U.S. insurance.
1. Insurance claims can be used to pay estate taxes. More and more people are coming to the U.S. to invest in real estate, but they may not know that after the death of the foreigner holding the property, his assets in the U.S. (mainly real estate) more than $60,000 will have to pay estate tax, the tax rate of 40%, and 9 months after the death of the person must fill out tax form 706NA, with cash to pay off the estate tax before inheriting the property. If you have purchased life insurance before your death, you don't have to worry about not having cash to pay the estate tax, you can directly use the compensation to pay the estate tax first and then get the inherited property, which can play a role in preventing unexpected risks.
2. In the United States, the cash value of the life insurance is not subject to lawsuits and is protected by judicial immunity. In other words the person is in jail, no one can touch the money on his insurance. The policy belongs to the policyholder and the large life policy will not be divided in case of divorce.
3. Buying life insurance is both a way to diversify investments and the best choice for spreading risk. Many people buy life insurance in the U.S. and put a lot of cash into the insurance because life insurance has the function of judicial exemption protection, which can relatively avoid debt. Also, the U.S. has not joined the CRS, so property located in the U.S. will not be disclosed.
4. Many permanent insurance policies also have a savings function. If you put in a large amount of money at one time, or put in a sum of money every year, the cash value on the insurance policy may accumulate to a considerable amount after a few years, which can be taken out as a pension or children's education fund in the future, and can be 100% tax-free.
5. U.S. life insurance is an immediate need for immigrant clients. If a U.S. immigrant buys a savings (participating) insurance policy elsewhere, the income generated by such savings (participating) insurance policy will be taxed as "income tax" because it is not a life insurance policy under the U.S. insurance law.
U.S. immigrants who purchase universal life insurance policies, regardless of whether they have a U.S. green card at the time of purchase, must meet the requirements of U.S. Section 7702 and 7702G at the time of purchase in order to be exempt from the exclusion tax. And in fact no foreign insurance policy meets the U.S. regulations for insurance and therefore will not be eligible for the income tax exemption on policy proceeds. In addition, any insurance purchased outside the U.S. is subject to a 1% excise tax on each premium paid after the green card is issued.