Page 1 | For financial professional use only. Revised 5/23/18 HCB00172

Insurance Planning for

Foreign Nationals

For financial professional use only. Revised 5/23/18 HCB00172

Page 2 | For financial professional use only. Revised 5/23/18 HCB00172

THE MARKETThe Foreign National market is large, lucrative and underserved.

By 2015, global High Net Worth (HNW) is expected to reach $55.8 trillion, with an annual growth rate of 6.5%.*

In today’s global economy, you may have high net worth (HNW) clients who live abroad but have ties to the U.S. and are seeking solutions to meet their estate and tax planning needs. Success in this market requires a partner that has knowledge and expertise you can rely on to help guide you to sales success.

Most Foreign Nationals who own U.S. property are not aware of, or do not consider, the significant tax issues that their families will face if they fail to plan appropriately.

Life insurance can offer this segment of the population a simple way to provide the liquidity necessary to pay estate tax liability due, and to help maximize the legacy left behind for loved ones. *Source: World Wealth Report, 2013, Capgemini and RBC Wealth Management; Capgemini, RBC Wealth Management, and Scorpio Partnership Global HNW Insights Survey 2013.

Insurance Planning for Foreign Nationals

HNW Clients who live abroad but have ties to the

U.S. (foreign nationals)

A non-citizen who lives in the

U.S. with a citizen spouse

Non-citizens have significant tax issues that

require specialized attention

MARKET

Page 3 | For financial professional use only. Revised 5/23/18 HCB00172

THE ISSUESThe HNW foreign national client (depending on their U.S. residency status) can face significant U.S. transfer taxes with a much lower exemption than U.S. citizens.

Resident Aliens (RAs) are Foreign Nationals who live in the U.S., even for a short time, with no definite present intent to leave the U.S. This group is taxed similarly to U.S. citizens for transfer taxes, but is subject to different tax rules that require unique planning.

Non-Resident Aliens (NRAs) are Foreign Nationals who do not live in the United States, but they are subject to U.S. estate and gift taxes on owned assets located in the U.S.

THE OPPORTUNITYLife insurance can provide a very compelling solution when compared to more complex alternatives.

Example Scenario: Non-Resident Foreign National who owns U.S. assets

For a Non-Resident Foreign National, only $60,000 in assets is exempt from U.S. estate taxes, but the client owns a property worth $10 million.

Purchasing life insurance may be a simple solution in this case, because a Foreign National can often own a policy on himself, and the death benefit will not be subject to U.S. income or estate taxes.

This means that a non-resident Foreign National with a taxable U.S. estate can buy and personally own an insurance policy on his life to pay the estate tax due and not have any increase in the size of his taxable U.S. estate.

Insurance Planning for Foreign Nationals

Page 4 | For financial professional use only. Revised 5/23/18 HCB00172

OUR SERVICESProduct Watch We analyze a wide range of products this highly specialized market requires to provide customized client solutions.

Subject Matter Expertise of High-End Strategies Our proprietary software illustrates custom solutions for your clients in the following areas:

• Intergenerational Wealth Transfer• Charitable and Legacy Planning• Business Continuation and Exit Planning Opportunities• Executive Retention Strategies

Advanced Planning Opportunities• Secondary Market*

Secondary Market management with high quality life settlement brokers• Premium Financing

Premium Financing capabilities to evaluate and model transactions and coordinate with leading industry lenders

• International Life Insurance* International life insurance for individuals without ties to the U.S.

OUR ABILITY TO NAVIGATE THE MARKETSuccess in this market requires a partner that has knowledge and expertise you can rely on to help guide you to sales success.

Customized Go-to Market StrategiesWe navigate the different perspectives between clinical medicine and underwriting risk assessment. HCB Underwriting gives your clients a competitive advantage in the market by:

• Maximizing access to specialized products developed for the foreign national market• Advocating for and securing the desired amount of protection• Negotiating competitive pricing and underwriting• Mitigating extra requirements

Packaging & Preparing Cases for MarketOur highly experienced case managers and underwriters have seasoned expertise – unparalleled in the industry – and carefully

• coordinate medical, non-medical and administrative requirements with the carriers• compose cover letters to support the case for the desired outcome. This is a critical piece of

the process and highly valued by our carriers partners.

Risk AssessmentOur talented team of professionally-trained underwriters have priority access to insurance company medical directors and third party medical providers. We assess mortality and morbidity risk in advance of sending your case to the insurance provider.

Jumbo & Complex UnderwritingWe are experts in procuring coverage for “jumbo” cases. Our team is equipped to address the complexities of new replacement policies. We carefully manage the requirements and limitations of carrier retention and reinsurance to maximize coverage and address client goals.

*For fixed insurance only

Insurance Planning for Foreign Nationals

Page 5 | For financial professional use only. Revised 5/23/18 HCB00172

CALL TO ACTIONThe U.S. real estate market is attractive to foreign buyers, which creates an opportunity to help these buyers protect their families and estates from high U.S. estate taxes.

• Check your own book of business. Are you working with a current client who might be married to or have connections to Foreign Nationals?

• Reach out to real estate agents catering to Foreign Nationals home sales.

• Talk to and align yourself with immigration and/or international tax attorneys, particularly those who work with clients on obtaining business, skilled worker and investor visas.

• Look at the major businesses and employers in your area. Many firms – particularly in the areas of science, medicine and technology – employ or do business with Foreign Nationals.

Insurance Planning for Foreign Nationals