Opportunity in HNW Foreign Nationals?

[Brian Anderson]

High-net-worth foreign nationals – especially those who own property in the U.S. – often have an exposure to a potentially hefty estate tax. The simple remedy? A life insurance policy, of course. The U.S. tax code considers life insurance on the life of a non-resident foreign national as not “situated within the United States” and, therefore, not included, as part of their U.S. gross estate. As the death benefit isn’t subject to U.S. estate tax, it goes to the heirs and/or beneficiaries intact.

Allan Gersten, CLU, ChFC, CFP, has contributed a new article to Insurance Forums asking why more life insurance agents don’t seek out the Foreign National market. He says foreign nationals have what every producer dreams about: need, urgency, and means. It’s a market offering the possibility of writing large cases with motivated HNW individuals. So why are so few producers active in it? He says it's because they don’t know enough about it.

Please give it a quick read and if you have any success stories about selling to foreign nationals please share them here or add your comments on the article.

Insurance Forums | Why don

 

[walthamny]

I work in this market and I had success with few clients. I have to say I don't agree with this article on the estate taxes due for foreign citizens on their US assets. Most of them escape the estate tax, here is why. A foreigner buys a condo in Manhattan for 2 million, he dies years later leaving to his wife who is also a foreigner. Wife decides to sell it, takes the funds and wires them back to her own country. What estate taxes or estate tax filing. If she does not file an estate tax, US does not have much power to chase her internationally. IRS does not lien every property immediately after death when the asset is owned by a foreigner. They are too busy with their floopy disks.

Now if the foreigner buys real estate and his children want to keep the real estate holdings may be there is a case for estate taxes and life insurance.

I found success with HNW who already have lots of life insurance in other countries. I have one client who had 20 million in term coverage with various carriers in Europe and Middle East. I sold him a 5 million perm and 5 million term to diversify his risk among insurance companies. Once you work on one, they always know someone in similar situation.

Another bigger market which everyone has access is when a HNW individual lives here with green card and refuses to get green card for various reasons. One common is that if they become US citizen, they will loose their home citizenship or for various nationalist reasons they don't want to become US citizen despite having a green card for 20 to 30 years. I have several clients who fit this category and because they don't get the 5 million estate tax exemption, they are great candidates for permanent life insurance.

Another great field is here when a 55 year old HNW citizen marries a 25 year old trophy and sponsors her here, like Donald Trump. While the wife is a green card holder, she does not get the unlimited estate tax transfer to spouses and if he were to die she would not get Social Security until they are married for full 3 years. So he needs lots of life insurance, has money to pay for it and I happen to run into them a lot.

I offer medical insurance, travel insurance, evacuation insurance services to these also, if they are looking for health insurance, you can set up a company here and get them group health coverage. The cross selling of services to these folks is endless.