High Net Worth Foreign Nationals (HNWFN), aka Global Citizens, are a GROWING market of individuals who typically possess assets and interests across the world and find particular financial safety and security in US domiciled businesses and properties. The growth of this market has expanded BEYOND the traditional US markets we’ve come to expect and includes both US citizens living abroad (typically for more than 12 weeks per year) and non-US citizens living in the US. The HNWFN market offers more OPPORTUNITY than EVER to write US based Life Insurance protection for your applicable clients. Foreign National Underwriting for High Net Worth Global Citizens is a growing and lucrative market.
This ONE Idea will provide an understanding of this HNWFN market and also provide information on our upcoming webinar titled, High Net Worth Global Citizens & Foreign National Underwriting. AgencyONE will be hosting this webinar in October and specifically dedicating it to this market and its opportunities.
What Qualifies A High Net Worth Foreign National?
HNWFNs typically have a net worth of $5M or more and possess global business interests and property and other assets that TIE them to the US. Because these assets and interests require protection against risk, properly structured temporary and permanent life insurance coverage can help mitigate the risks to which HNWFN are exposed – including generational wealth transfer and taxation on their worldwide income and assets.
Benefits of Life Insurance for High Net Worth Foreign National
Taxation issues may arise for couples when one partner is NOT a US citizen and become problematic upon the death of one spouse. Most clients are NOT aware that taxes will be due …until the IRS letter arrives! The solutions to this problem lie in strategic estate planning and the necessary life insurance protection.
US life insurance offers many benefits to the HNWFN:
- Asset diversification in global markets
- Assets that are held in US dollars
- Possibly less restrictions than life insurance from their home country
- Increasing number of carriers available
- Better pricing and more coverage availability
- Industry regulation offering security and privacy
Underwriting for the HNWFN is NOT uniform from carrier to carrier. It varies and depends upon many factors such as:
- Country of current residence
- Connection/ Nexus to United States
- Travel schedule
- Green Card/ VISA status – an area of confusion for many advisors and clients.
- Green Card Holder – someone who is a permanent resident alien (Foreign National non-US citizen). Underwriting for a green card holder is treated like the underwriting of a US citizen and is routine for the most part.
- A VISA is issued to a citizen of a foreign country wishing to come to the US. They are more complicated because there are so MANY types (student, tourist, temporary worker, long-term worker, etc., etc., etc.), limitations depending upon country of origin, residency minimums, and rating limits.
- Ability to provide applicable medical and financial requirements
- Solicitation requirements
Every High Net Worth Foreign National Case is Different
As always, each case is different, but AgencyONE’s extensive knowledge about this market and our carrier partner relationships will help you identify the RIGHT CARRIER for your client and get your CASE PLACED. Following are some examples of cases that were recently placed:
- $5M Key Person Term Coverage – Japanese Citizen
A 44-year-old standard NT female came to the US to live and work as a CEO of an advertising firm. She needed $5M of term insurance for Key-Person coverage. AgencyONE identified a number of carriers that would have been ideal for this client, but as we got further into the underwriting process, we discovered that the client still owned property in Japan. This ownership had the client falling into the HNWFN classification as opposed to a resident alien. This was a problem because most carriers will not provide coverage to Japanese citizens. (Japan has regulations that do not allow citizens to buy insurance coverage outside of their home country.) AgencyONE worked with one of our carrier partners who was willing to write this case and provide the client with the key person term coverage needed despite her status as a resident alien.
- $7M Permanent Coverage – Canadian Citizen
A 54-year-old preferred NT male who is a Canadian citizen spends the majority of his time in Russia. His advisor approached AgencyONE looking for $7M of permanent coverage and asked if we had any carriers that would accept this risk. This client had ties to the United States in the form of real estate interests and brokerage accounts. The challenge with this case was the amount of time the client spends in Russia. Many carriers who write HNWFN business have Anti Money Laundering (AML) concerns with the country of Russia. AgencyONE again identified the RIGHT carrier for this client and was able to secure the permanent coverage requested despite the fact that the client spent the majority of his time in Russia. A great outcome for all involved. (Cheers – vashe zdorov’ye)
- $9.8M Permanent Coverage – Chilean Citizen
A very wealthy 48-year-old Chilean citizen who was an impaired risk had relocated to the US. He was in the US on a specific visa. This VISA, an investor visa, qualified the client as a HNWFN. This required that he be underwritten as a HNWFN rather than as a domestic client. Since the client had a medical risk that would have bumped him out of allowable coverage through a HNWFN program but not a domestic program, AgencyONE needed to manage the case with “the right” carrier partner to view the client domestically. The coverage was needed to offset future taxes. With the Investor visa, the client would eventually be a permanent US resident and citizen or green card holder exposing his global net worth to US taxes.
Details Make or Break a Case
We often say at AgencyONE that the details will make or break a case. The HNWFN market is exciting, challenging and rewarding. Term and permanent coverage are available from many carriers, but it is CRITICAL to understand the carrier NUANCES – there are MANY. The HNWFN platforms that the carriers offer are unique in that they are even MORE competitive than the products offered. Securing coverage is the key and AgencyONE has the KNOWLEDGE and RELATIONSHIPS to direct your client to the right carrier!
Please watch for the invitation to a very special HNWFN webinar in October where we will discuss this marketplace and these opportunities in greater detail!