The life insurance industry in the United States is mature and developed, and the fully competitive market environment enables policyholders to enjoy quality services at low cost. Before, many customers knew that the insurance cost in Hong Kong was quite low, but they didn't know that the insurance cost in the United States was three times lower than that in Hong Kong.
In the United States, insurance companies engaged in life insurance business are protected by American bankruptcy law, and insurance companies are not allowed to declare dissolution or bankruptcy at will. Poor insurance companies can only be merged by other companies engaged in life insurance business, or taken over by state or federal governments. At the same time, the CIRC will audit insurance companies every quarter. If the solvency of the insurance company cannot reach 102%, the CIRC will intervene in advance.
Life insurance is an indispensable part of American immigration tax planning and non-immigrant global asset allocation. It is an important link in our tax planning to allocate insurance in combination with domestic and foreign tax information. Now, make a general analysis of American life insurance products.
I. Classification of American Life Insurance
1 term life insurance $ TERM life insurance
Term life insurance is the earliest and simplest insurance. This kind of insurance has a certain guarantee period, such as 10 years, 15 years, 20 years and 30 years. After the insurance contract expires, the guarantee will stop. If the insurance is renewed, the insured will get old and the premium will be very expensive.
Although term life insurance is cheap, it has no cash value and no function of saving and investing. This kind of insurance product is very pure consumer insurance, which is most suitable for young people with limited budget.
Term life insurance
whole life insurance
2 whole life insurance, whole life insurance
Whole life insurance is valid until the death of the insured. The premium paid by the insured will be converted into cash value after paying a fixed insurance fee. Insurance companies will regularly distribute dividends according to the company's profitability, but the distribution and amount of dividends are not guaranteed. The cash value of insurance will increase over time. However, if the insured wants to surrender early, he can only get back a very limited cash value.
The biggest problem of whole life insurance products is that the dividend standard is opaque, and the cash value before death is extremely difficult to use.
3 universal life insurance
Due to the inflexibility of whole life insurance, a new type of life insurance-universal life insurance came into being. Universal life insurance is similar to whole life insurance, and its coverage is life-long. After paying the insurance premium, the remaining premium will be invested in another account. The provisions of universal insurance are more flexible, and there are no hard and fast rules on the time and amount of payment, as long as the minimum payment level is reached. It also has a moderate cash value and can be raised when needed.
The income of universal insurance is generally linked to the market interest rate. In the current low interest rate environment, the actual income of universal life insurance is generally lower than the expected income.
4. Investment universal life insurance variable universal life insurance
Investment universal life insurance evolved from universal life insurance. On the basis of universal life insurance, the concept of fund investment is added. Customers with investment experience can make use of the characteristics of this insurance product to choose a fund portfolio that meets their own risk expectations, so as to optimize their insurance returns.
However, for non-professional investors, the investment function of such products is often like chicken ribs, which is no different from traditional universal life insurance in application and cannot play its independent investment characteristics.
5 index universal life insurance index universal life insurance
Exponential universal life insurance (IUL) is an improved product in recent years.
The investment income of cash accounts of such products does not refer to the market interest rate or the operating conditions of insurance companies, but refers to the Standard & Poor's 500? Index to refer to dividends (a few companies also refer to other global indexes), and insurance companies promise to protect their capital, so that the investment income will not be negative and the principal will not be lost.
This product is the most advanced life insurance product in the world at present, which has achieved a good balance between high yield and capital preservation, and is suitable for almost everyone.
Second, what index does IUL refer to?
The operating mechanism of IUL is to put the total premium of customers into the market after deducting the basic expenses required for life insurance. According to the regulations of the US Insurance Regulatory Bureau, 90% of the funds will be invested in risk-free bonds, and another 65,438+00% will be invested in the options trading market. Most companies refer to the Standard & Poor's 500 in the United States? Index dividends, a few companies will refer to the world's three major index dividends. At the same time, IUL products promise to protect capital. Therefore, this product has higher investment income and is safer than the traditional universal life insurance.
Standard & Poor's 500 Index; P500？
Recording the stock index of 500 listed companies in the United States can flexibly adjust the price changes caused by new share subscription, stock dividend and stock split, and the index value is more accurate.
Europe Stoxx 50 Index?
The market value weighted average index of 50 super blue chips listed in the capital markets of EU member countries such as France and Germany 12.
Hang Seng index
The weighted average stock price index, which takes 50 listed stocks in Hong Kong stock market as constituent stocks and its liquidity as weight, is the stock price index that can best reflect the price range trend of Hong Kong stock market.
Third, what is the risk of linking the index?
The product is linked to the index, and the yield is affected by the rise and fall of the index. So is the product risky? This is the issue that everyone is most concerned about.
1 historical return data analysis
The historical performance of the return on assets of American stock market in the past 200 years shows that, on the whole, the share price of American stock market is on the rise for a long time. The above-mentioned IUL products mainly refer to the Standard & Poor's 500 Index of the United States, and the following figure shows the yield trend of the Standard & Poor's 500 Index of the United States in recent 20 years (1996-20 16).
* 1996 -20 16 S&P exponential return trend chart
As can be seen from the above chart, the S&P 500 index fell before and after the dotcom bubble in 2000, the Iraq war and the 9 1 1 incident, the subprime mortgage crisis in 2007 and the stock market crash in 2008, but it rebounded quickly and continued to rise.
Let's take a look at the return of IUL products linked to the S&P 500 bonus (as shown below). During the decade when the S&P 500 index lost money (200 1-20 10), the return of IUL products was quite stable. Even when the index plummeted around 200 1 and 2008, IUL products can guarantee 0% capital preservation income (IUL products promise capital preservation).
* Historical rate of return on IUL products linked to dividends paid by the Standard & Poor's 500 Index.
In addition, if we use the data of the Standard & Poor's 500 Index in the past 50 years and start to participate in the market for 20 years at any time, the average annual income can reach about 7%. Therefore, IUL products are linked to the Standard & Poor's 500 Index, and product owners do not need to worry that the economic crisis will cause the index to plummet all the year round, which will affect the policy and lead to the invalidation of the policy due to insufficient cash value in the policy.
Will the bull market continue?
The bull market of US stocks has been going on for eight years, but for investors, they are more concerned about the future trend of US stocks.
There is a famous saying on Wall Street-"Eight years ago, it relied on the central bank, and eight years later it relied on Trump." After Trump took office, the US stock market saw an opportunity. As of the close of 10 in March, the annual return rate of the Standard & Poor's 500 Index was as high as 17.33%, and Trump's contribution after being elected was as high as 1 1%.
At present, the market views on US stocks are divided into two groups-one group thinks that the bull market has exhausted and the callback is imminent; Another school believes that once Trump's deregulation, tax reduction and infrastructure investment measures can be truly implemented, coupled with the great development of science and technology, the US stock market will usher in another "revival" development.
Analysts believe that in the short term, it is not impossible for US stocks to pull back, but this does not mean the end of the bull market.
At present, there are three favorable factors supporting the upward trend of US stocks:
1) Compared with the historical level, the Fed's monetary policy is very loose;
2) American economy is full of endogenous vitality, and science and technology are developing rapidly, but there is no real chemical reaction between them, which has produced a spark to completely improve productivity;
3) If Trump's proposal to encourage private enterprises to increase their spending with tax breaks is approved by Congress, then the American economy can be greatly boosted in the long run.
After Trump took office, the breakeven inflation rate of the United States 10 rose from 1.5%- 1.75% which was lower than the Fed's multi-year target (the Fed's target was 2%) to 2. 1%, indicating that Trump's policy greatly increased the market's confidence in the United States in the next decade.
The fundamental reason for the long-term slow development of the American stock market lies in the excellent economic fundamentals of the United States. During the nearly 30 years from the early 1980s to the financial crisis in 2008, the American economy developed steadily, with an annual GDP growth rate of around 4%, which is a relatively high level for developed economies like the United States.
Although the economic crisis in 2008 had a huge negative impact on the real economy and stock index in the United States, in recent years, with the stimulation of quantitative easing policy and the growth and development of the Internet economy, various economic data in the United States have picked up, including consumer confidence index, non-agricultural employment rate, manufacturing data and housing prices. Various economic data show that the American economy has emerged from the crisis and is slowly recovering.
The product characteristics of IUL enable it to get a certain return when the economy improves, and it can also use the characteristics of insurance platform to realize capital preservation when the economy declines. Therefore, regardless of the future development direction of the American market, IUL is a very good insurance product.