Citizens of the World

| August 07, 2017

The worldwide total of individuals with a net worth of over $30,000,000 has increased by over sixty percent in the last ten years.  Increasingly, we live in a global economy where individuals are relatively free to travel and invest outside of their home country and are essentially, ‘Citizens of the World’. Many of these individuals are non-resident aliens (NRAs) who reside outside of the US but have strong physical and financial ties to the United States.  They frequently rely on US based advisors to manage their global assets and utilize US insurance products for protection.

Non-resident aliens (NRAs) are subject to a complex set of tax codes and international treaties for wealth transfers.  NRAs are typically treated much less favorably than US citizens when it comes to estate taxes or gifting.  For example, the first $5,340,000 of assets is exempt from estate taxation for US permanent residents and citizens while for NRAs the exemption is only $60,000. NRAs also do not have a lifetime gift tax exemption and only $1,000,000 is exempt for generation skipping transfers.  With these low limits, a very modest amount of US tangible assets can quickly create a substantial US tax liability.

High net worth foreign nationals seek US based life insurance products as the solution for the following reasons:

  • Unlike US citizens, an NRA can personally own a policy on his life without increasing their estate tax liability.
  • US based products typically offer longer guarantees and lower cost than products available in the NRA’s home country.
  • US based carriers can routinely offer over $30,000,000 of coverage which is rarely available with overseas carriers.  
  • Stable currency 
  • Strick regulations of the US insurance industry

Success in this complex market requires a partner that has knowledge and expertise to help guide you.   We are well positioned to be your partner. For almost twenty years we have assisted advisors to identify and satisfy the needs of these sophisticated clients. For additional information, I encourage you to visit my LinkedIn page to read my article on Foreign National Underwriting. 

Contact me and allow me to draw on my sales and underwriting experience to advocate for your client.  I can be reached at 800-426-6848 ext. 121