With the increasing popularity of going to the United States to have children, there are more and more beautiful babies around. After the child is born and grows up, many parents begin to think about buying some related insurance for their baby. MEBO families, including those who plan to send their children to study in the United States in the future, how should they buy insurance? Should they buy insurance from the United States or Hong Kong? Or is it domestic? This is a question that many parents are concerned about and have a headache about. In this regard, I specially found an article from Mao Ma to share with you how MEBO families should buy insurance for their children. I hope it will be helpful to all parents. can help. Regarding the issue of buying insurance for MEBO, Cat Mom would like to remind all parents not to be deceived again! Except for medical insurance that must be purchased (can only be purchased) after the child goes to the United States in the future, there is basically nothing in the insurance in the United States that is applicable to children. Products for your baby! If you want to plan and allocate assets reasonably in advance for your baby and your family's life in the United States, consider buying insurance as soon as possible for protection. You can only buy it for yourself as parents!

< p> MEBO families, including families who plan to send their children to study in the United States in the future, how should they buy insurance? Should they buy insurance from the United States, Hong Kong, or China? This should be the most concerned about these families, but it is the most controversial and confusing. It's a matter of indecision.

The background of cat mothers is often filled with such problems. However, due to the lack of talent and knowledge in this area, the so-called previous research was too sketchy, and I have never dared to give you some pointers. Fortunately, recently, Cat's Mom met a friend who has been working in the American insurance industry for 10 years. He is already quite senior and holds a key position. So Cat's Mom quickly asked her for advice on many insurance issues that the MEBO family is concerned about, and she was enlightened and enlightened.

For example, if Meibao now lives in China, there are basically no products suitable for her children in U.S. insurance.

If Meibao, who returned to China after birth, wants to buy U.S. insurance products, For formal insurance companies, it is very difficult to underwrite insurance, and insurance companies almost never sell to such customers. Moreover, the amount of insurance coverage for children is also limited. If the child is young, there is no point in buying products with high insurance coverage. Therefore, those American insurance brokers who come to confinement centers to give classes to Chinese pregnant women and educate you on how to buy insurance for your children are all scammers.

Among the products they promote are medical, they recommend MEBO to buy an international medical insurance. In fact, if MEBO only goes to the United States once a year or even several years at this stage, this kind of consumer medical insurance is not cost-effective.

First of all, this kind of insurance has a high deductible whether it is medical claims in the United States or in China; secondly, this type of insurance has many things that are not covered, including traditional Chinese medicine and mental illness. , pre-existing conditions, congenital diseases, hereditary diseases, dental and ophthalmology, treatments not recommended by doctors, over-the-counter drugs...etc. Moreover, the number of accredited hospitals in China is quite limited, and whether these hospitals are listed is extremely unstable and changes from time to time.

It is not that there are no insurance products suitable for children in the United States. The participating insurance in the United States, such as New York Life or Metropolis

The participating insurance in the United States is more suitable for children, similar to the savings and financial insurance in Hong Kong. But if the child lives in China and the parents are foreigners, it is almost impossible to pass the underwriting (unless you invest a lot of assets in the United States...).

Currently, the only insurance policy in the United States that still has a slight chance of passing underwriting is a 5-in-1 universal life insurance that can insure children. But if you want to insure a child, both parents must insure together, and there must be a strong US tie (connection with the United States), such as a real estate, company or bank investment account in the United States. Some American insurance brokers who are eager for quick success will lobby their clients to open companies in the United States in order to make underwriting easier, but they do not consider the risk that the client's company will have to declare taxes in the United States in the future even if it has no business income.

Buying Hong Kong insurance for your children involves the risk of paying taxes on overseas assets in the future.

Due to the continued depreciation of the RMB, many families are considering using overseas asset allocation to achieve the purpose of preserving value. Purchasing Hong Kong financial insurance has become the main investment method. Hong Kong insurance is becoming more and more popular in the mainland market. Every weekend in the past two months, the photos of mainland customers queuing up outside major insurance companies in Hong Kong are also eye-popping.

But is it suitable for MEBO families to buy this kind of insurance in Hong Kong?

This depends on two aspects. First, it depends on whether the underwriter (i.e. the insured) is the parent. They are still underage children; second, it depends on the family’s future life plans and whether they plan to immigrate to the United States with their children.

1. Is the underwriter a parent or a minor child?

If the underwriter is a child, assuming that it is MEBO who will definitely choose American citizenship and settle in the United States when he becomes an adult, then Be cautious. Because of the insurance purchased for their children, when the children become adults, the parents must transfer the policyholder status to the children in order to allow the children to take out the insurance on their own (otherwise, why would you buy it for your children? Just buy it for yourself). For insurance purchased by U.S. citizens in Hong Kong, no matter what type of policy you have, interest and dividends withdrawn before the end of the policy (as long as they exceed the principal) are considered income and tax must be paid!!! And if you choose an education fund for your children, type of financial insurance, then your goal is not to be able to use part of the money to support your child's college education when the child turns 18? At this time, you must pay taxes to the U.S. government.

From a global perspective, the United States is the country with the strictest supervision of financial accounts. According to the U.S. tax collection and administration system, if the inflow of transaction funds from a personal account exceeds US$10,000, taxpayers must file a tax return. Financial institutions must report the taxpayer's interest, dividends and other income in detail every year and transmit it to the tax department through computer networking.

In 2010, the U.S. Congress passed FATCA (Foreign Account Taxpayer Act), extending its tax jurisdiction to financial institutions around the world and requiring financial institutions around the world to report U.S. customer account information to the U.S. government. Financial institutions that do not cooperate will be subject to a 30% withholding tax on their U.S.-sourced income.

On February 8, 2010, the U.S. Department of the Treasury and the U.S. Internal Revenue Service announced the first version of implementation details, suddenly advancing the global process of FATCA. It requires that U.S. citizens and U.S. green card holders who live in the United States and own more than $50,000 in assets overseas, or who live outside the United States and have more than $200,000 in assets overseas, must submit a report to the U.S. before April 15, 2012. If you refuse to file a tax declaration with the government, you will be deemed as intending to evade taxes. Once found, you will be fined up to US$50,000, and in serious cases, you will be sentenced.

The circled part in the picture below is a detailed description of the tax agreement between the United States and Hong Kong in the product description of an investment life insurance company of Hong Kong AXA Insurance Company.

Therefore, many Hong Kong insurance brokers also lie that MEBO families or families who have immigrated to the United States can avoid taxes by purchasing dividend financial insurance in Hong Kong. They are purely bullying you because you have little education.

2. Regarding family future planning

If the parents do not plan to immigrate as soon as possible in the future or wait for the children to undergo reunion immigration when they become adults, then the parents can purchase any insurance in Hong Kong as the underwriter. , to protect the future of your family and children, because you will not become an American. And if your parents plan to immigrate to the United States, then you should also be careful. If you buy Hong Kong insurance, please be prepared for the risk of being levied overseas asset tax in the future.

How to buy MEBO insurance?

Then there is no insurance suitable for MEBO in the United States, and any insurance with dividend income in Hong Kong is not suitable for MEBO. If parents want to provide their children with health and education protection, what kind of insurance should they choose? What about insurance?

Medical insurance

1. If the child mainly lives in China before adulthood

In this case, if you need to protect the child’s medical care, it is suitable Buy high-end consumer medical insurance that can be reimbursed by private hospitals (Hong Kong has limited options for such high-end consumer medical insurance and has great usage restrictions). You can buy it in China, either from international insurance companies or domestic joint ventures. Generally, the father or mother and the child are required to buy together. The annual premium for the two of them together is as high as RMB 30,000 to RMB 50,000, but the protection is relatively comprehensive.

If you want to buy critical illness insurance for your children, domestic critical illness insurance is generally not designed to have financial management value and investment dividends like the ones in Hong Kong, so you can also buy it for your children. As for the cash value generated by interest, if it is not withdrawn in advance, the insured amount received in the event of an accident or at the end of the policy will not be regarded as overseas assets by the United States, that is, it will not be taxed. And if you guarantee that you will not withdraw cash in advance or transfer the policy holder to a child when the child reaches adulthood (otherwise, the portion exceeding the principal will still be subject to overseas income tax), you can also purchase Hong Kong critical illness insurance for your child.

2. If the child will go to the United States to study earlier

In fact, if the child is healthy, there is no need to rush to buy medical insurance in China or Hong Kong. You can wait until the child arrives in the United States and then buy the American insurance. medical insurance. Because as long as the child arrives in the United States, intends to live there for a long time, and starts studying, he will inevitably be required to purchase American medical insurance. You know, living in the United States is difficult without medical insurance. Americans almost never use cash to seek medical treatment, mainly because it is too expensive, and it is impossible to afford medical treatment without purchasing medical insurance.

The medical insurance in the United States stipulates that there are no restrictions on diseases, no past medical history, and no upper limit on claims. This is the biggest feature that distinguishes it from domestic and Hong Kong insurance. So, don’t worry that you didn’t buy American medical insurance when your children were young or healthy. It doesn’t matter. You buy this kind of consumer insurance just to use it.

Education fund-type financial insurance

Because this type of insurance involves profit distribution, it will be considered by the United States as income other than principal, and overseas assets will be levied if it exceeds a certain amount. of taxes. Therefore, if you are concerned about this, try to avoid purchasing such insurance directly with children as the underwriter.

So, if parents want to prepare an education fund for their children, what should they do? Buy insurance for yourself to save and invest, name your children as the insurance beneficiaries, and then withdraw the money to your children as an education fund. .

The savings life insurance in the United States has become the best financial allocation for the MEBO family. This kind of insurance can be flexibly withdrawn at any time to serve as a children's education fund and your own retirement pension in the future. It can also rationally allocate family assets, realize property inheritance, and avoid the high inheritance tax in the United States.

Moreover, regardless of whether you plan to immigrate to the United States in the future, you can purchase this type of insurance to protect your children and family in the United States.

Because of this kind of insurance, U.S. regulations allow it to be sold to foreigners who do not live in the United States. It’s just that you may have to go to the United States to sign a contract.

Insurance in the United States generally does not recommend that customers withdraw money in one go, but in batches and maintain it until the end of the policy, so as to avoid paying taxes. Because withdrawals in the United States are conducted in the form of withdrawals (within the principal) and loans (exceeding the principal), no tax is required.

As for the inheritance tax of up to 40%, most middle-class and above-average families in the United States also reasonably avoid it by purchasing life insurance to maximize the assets left to their children, not to mention that they like to spend their money after working hard all their lives. Chinese parents who leave everything to their children must do this. Regarding how the MEBO family transfers property to their children through insurance, Mao Mao will open a separate chapter to analyze it in detail in the future, so stay tuned.