FAQ
The policyholder is the individual who owns and pays for the life insurance policy, while the beneficiary is the person or entity designated to receive the death benefit upon the policyholder’s death.
The death benefit is the amount paid out to the beneficiary when the insured person passes away. It’s the primary purpose of life insurance.
Yes, life insurance, especially policies with cash value, can sometimes be used as collateral for a loan.
A rider is an add-on to a life insurance policy that provides additional benefits or coverage. Common riders include accelerated death benefits, waiver of premium, and accidental death benefits.
Premiums are based on factors including the insured’s age, health, lifestyle, the policy type, coverage amount, and the term length (for term policies).
Underwriting is the process insurers use to evaluate the risk of insuring a person, determining whether they will provide coverage and at what premium rate.
Insurable interest exists when the policyholder would suffer a financial loss or hardship if the insured person dies. It’s a legal requirement for obtaining a life insurance policy on someone.
Coverage might still apply, but it’s important to review the policy and inform the insurer about relocation, as terms and coverage may vary based on location.
Not always. Some policies, like simplified issue or guaranteed issue life insurance, don’t require a medical exam, but they may come with higher premiums and lower coverage amounts.
A living benefit, or accelerated death benefit, allows policyholders to access some of their death benefit early if they are diagnosed with a terminal illness.
Yes, most life insurance policies allow you to change your beneficiary unless the beneficiary is designated as irrevocable
The ‘free look’ period is a time frame during which a new policyholder can cancel their life insurance policy without penalty, typically lasting from 10 to 30 days.
Life insurance policies usually have a suicide clause, typically stating that no death benefit will be paid if the insured commits suicide within a specified period (usually two years) from the start of the policy.
Dividends are returns on a participating life insurance policy (usually whole life) paid out when the insurer’s performance exceeds projections. They are not guaranteed.
Actual cash value is the cash value of the policy minus any fees and outstanding loans, while surrender value is the amount you receive if you surrender the policy before its maturity or the insured event occurs.
Smokers generally pay higher premiums than non-smokers due to the increased health risks associated with smoking.
A grace period is a time frame after a missed premium payment during which the policy remains in force. If the premium is paid within this period, the policy continues without lapse.
A revocable beneficiary can be changed without their consent, while an irrevocable beneficiary must agree to any changes in their status.
Yes, beneficiaries can use life insurance proceeds for any purpose, including covering funeral expenses.
A collateral assignment is a legal process where a life insurance policy is used as collateral for a loan. If the borrower dies, the lender receives the amount owed from the death benefit, with the remainder going to the beneficiary.
A policy loan allows the policyholder to borrow against the cash value of their life insurance policy. Interest is charged, and unpaid loans can reduce the death benefit.
If you outlive your term life policy, the coverage ends, and no death benefit is paid. Some policies offer a renewal option or conversion to permanent insurance.
Whole Life Insurance is a type of permanent life insurance that provides lifelong coverage with a fixed premium and a cash value component.
The cash value in a WL policy grows over time, typically at a guaranteed rate set by the insurance company and can be borrowed against or withdrawn.
Premiums in WL insurance are fixed and do not change over the life of the policy.
Participating WL insurance policies may pay dividends, but they are not guaranteed.
The death benefit may be reduced by the amount of any outstanding loans against the policy’s cash value.
Increasing the death benefit typically requires additional underwriting and may result in higher premiums.
Yes, WL premiums are generally higher than term life insurance premiums due to lifelong coverage and the cash value component.
WL policies offer tax-deferred cash value growth and tax-free death benefits.
Yes, WL can be effective for estate planning, providing a tax-free inheritance to beneficiaries.
UL is a type of permanent life insurance that offers flexible premiums and an adjustable death benefit, along with a cash value component.
The cash value in UL grows based on the current market interest rates, which can vary.
Yes, UL policies allow for flexibility in premium payments within certain limits.
If interest rates are low or costs increase, you might need to pay higher premiums later to keep the policy in force.
Yes, you can increase or decrease the death benefit, subject to underwriting approval and policy terms.
Yes, you can increase or decrease the death benefit, subject to underwriting approval and policy terms.
The policy may lapse if the cash value is not enough to cover the cost of insurance.
Interest growth is tax-deferred as long as it remains in the policy.
They can be, but it’s important to understand the risks and ensure the policy is properly funded.
IUL is a type of UL insurance where the cash value’s growth is tied to the performance of a stock market index, like the S&P 500.
The growth is linked to a market index but typically has a guaranteed minimum interest rate and a cap on maximum earnings.
Yes, like UL policies, IULs offer flexible premium payments
The cash value’s growth is uncertain due to its reliance on market performance, and if not properly managed, the policy could lapse.
Due to the guaranteed minimum interest rate, you typically won’t lose cash value even if the index performs poorly, but fees and costs can still reduce the value.
IUL provides a more conservative investment compared to direct market investments, with caps on returns but protection against losses.
IUL provides a more conservative investment compared to direct market investments, with caps on returns but protection against losses.
It can be, providing a death benefit and potential for cash value growth that can be used for estate planning purposes.
It depends on your financial goals, risk tolerance, and need for flexibility. Consulting with a financial advisor is recommended.
Yes, insurers can change the cap rates, subject to policy terms, which can affect the policy’s growth potential.
WL has fixed premiums, UL offers flexible premiums that can be adjusted based on the policyholder’s needs and policy terms, and IUL also has flexible premiums but tied to a stock market index performance.
WL provides a guaranteed death benefit. UL and IUL offer adjustable death benefits, but changes may require additional underwriting.
WL grows at a guaranteed rate set by the insurer. UL grows based on interest rates with minimum guarantees. IUL’s growth is tied to a stock market index, with both a guaranteed minimum and a cap on returns.
WL offers guaranteed returns. UL has a minimum interest guarantee, but returns can vary. IUL offers a floor to prevent loss, but returns are capped and linked to market performance.
WL is straightforward with fixed premiums and benefits. UL and IUL are more complex, requiring active management to ensure the policy remains in force and meets financial goals
UL and IUL offer the most flexibility in premium payments, allowing policyholders to adjust the amount and frequency within certain limits.
UL and IUL offer the most flexibility in premium payments, allowing policyholders to adjust the amount and frequency within certain limits.
UL and IUL offer the most flexibility in premium payments, allowing policyholders to adjust the amount and frequency within certain limits.
WL is generally viewed as the most stable option for long-term investment due to its guaranteed cash value growth
All three types allow policy loans against the cash value, but the loan interest and impact on the death benefit can vary depending on the policy’s performance and type.
In WL, the cash value does not decrease due to market changes. In UL, it can decrease if the costs exceed interest earnings. In IUL, the cash value is subject to the performance of the chosen index, but typically has a guaranteed minimum interest rate to prevent loss.
In WL, the insurance company manages the risk. In UL, the policyholder bears some risk related to interest rate changes. In IUL, the policyholder also bears risk, but it is tied to the performance of a stock market index.
WL is the best option for those seeking predictability and guarantees in both the cash value growth and death benefit.
WL has lower return potential due to its conservative nature. UL offers moderate potential, and IUL potentially offers higher returns due to its link to the stock market, albeit with a cap on maximum earnings.
UL and IUL may require ongoing premium adjustments to respond to changing interest rates or market conditions, whereas WL has fixed premiums.
WL is generally preferable for risk-averse individuals. Those comfortable with moderate risk might opt for UL, and those willing to accept higher risk for potentially higher returns might choose IUL.
Foreigners may consider U.S. life insurance for its stability, reliable regulatory environment, diverse policy options, and potential estate planning benefits, especially if they have financial interests or family in the U.S.
U.S. life insurance can provide liquidity for estate taxes or other expenses, ensure fair distribution of assets among heirs, and sometimes avoid probate proceedings
Yes, it can provide financial security for their family in the transition, especially if the primary earner’s life is insured.
The U.S. insurance industry is known for its strong regulatory framework and financial stability, making these policies a reliable choice for international citizens.
It can be used for key person insurance, buy-sell agreements, or collateral for business loans, protecting their U.S.-based business interests.
Yes, it can provide financial security for educational expenses and living costs in the event of the policyholder’s death.
It’s an effective tool for managing wealth and liabilities across borders, especially for individuals with assets and family in multiple countries.
Depending on their country of residence and tax laws, foreigners may benefit from favorable tax treatment on the policy’s cash value growth and death benefit.
Policies are in U.S. dollars, which can be a stable currency option for policyholders concerned about currency fluctuations in their home country.
While it doesn’t directly affect credit scores, it demonstrates financial responsibility and stability, which can be beneficial in financial dealings.
U.S. insurers generally maintain high standards of privacy and confidentiality, which can be appealing to international clients.
U.S. insurers generally maintain high standards of privacy and confidentiality, which can be appealing to international clients.
It ensures that their U.S.-based family has financial support for living expenses, education, or any outstanding debts in the event of their demise.
Yes, many U.S. insurers offer customizable policies to cater to the unique needs of international clients, including coverage amounts, terms, and riders.
The death benefit can be used to cover estate taxes or other debts associated with U.S. assets, ensuring they are not liquidated under financial duress.
U.S. policies often have more diverse and flexible coverage options, potentially offering higher coverage limits and various rider options.
Yes, the death benefit can be designated to support charitable causes in the U.S., aligning with the policyholder’s philanthropic goals.
The U.S. life insurance market is highly competitive, often offering favorable premium rates compared to other countries.
A larger market means more choices in terms of policy types, coverage amounts, and competitive pricing, suiting a wide range of needs and preferences.
It’s an effective tool for creating a financial legacy, ensuring wealth is transferred to future generations according to the policyholder’s wishes.
While there may be additional documentation required for foreign beneficiaries, U.S. insurers typically have clear, established processes for claim settlements.
No, U.S. residency is not always required, but the applicant usually needs to have significant ties to the U.S., such as business interests, properties, or family.
Long-term visas like work (e.g., H1B) or immigrant visas are generally acceptable. Short-term or tourist visas may not be sufficient.
While an SSN is commonly requested, some insurers may accept an Individual Taxpayer Identification Number (ITIN) instead.
Most U.S. insurers require premium payments from a U.S. bank account. However, arrangements can sometimes be made for international transfers.
It depends on the insurer. Some may accept medical examinations conducted in China, while others require a medical exam in the U.S.
Yes, U.S. life insurance is often used for estate planning purposes, particularly if they have assets or family in the U.S.
Payouts can be made to beneficiaries in China, but the process may involve additional documentation and might be subject to U.S. and Chinese tax laws.
Death benefits are typically paid in U.S. dollars, regardless of the policyholder’s or beneficiary’s location
The tax implications can vary. Generally, U.S. life insurance payouts are not subject to U.S. income tax, but policyholders should consult with tax advisors in both the U.S. and China.
They might, especially if they frequently travel between the U.S. and China, as insurers consider travel and residency history in their risk assessment.
It may be, as insurers will thoroughly assess the need and financial justification for large policies, especially for foreign nationals.
Yes, it can be a strategic part of cross-border wealth transfer and estate planning for Chinese families with international assets.
Factors include age, health, lifestyle, the amount of coverage, policy type, and international travel or residency status
It’s important to consult with legal and financial advisors familiar with both U.S. and Chinese regulations to ensure compliance and optimize the policy structure.
Yes, policies can often be owned by trusts or other entities, which can be a useful strategy for estate planning and asset management. However, this requires careful planning to ensure compliance with U.S. and Chinese laws.
Yes, foreigners can buy life insurance in the U.S., but they must meet certain criteria set by insurance companies, which can include having a valid visa or other ties to the U.S.
Typically, long-term visas like work visas (H1B, L1), green cards, and sometimes student visas (F1) are accepted. Short-term or tourist visas usually are not.
Most U.S. insurers require an SSN or an Individual Taxpayer Identification Number (ITIN) to apply for life insurance.
Not necessarily, but you usually need to start the policy as a resident. Some policies may allow you to maintain coverage if you move abroad later.
Assessment includes standard criteria like health, age, and lifestyle, but for foreigners, it also involves evaluating visa status, residency duration, and potential risks associated with travel or residence in other countries.
Most U.S. life insurance companies require payments from a U.S. bank account.
Premiums are based on risk assessment, which includes health and lifestyle. Being a foreigner doesn’t inherently increase premiums, but factors like travel frequency and country of origin can impact risk assessment.
Common documents include a valid visa, proof of U.S. residency, SSN or ITIN, medical records, and sometimes proof of financial ties to the U.S.
Yes, most U.S. life insurers allow foreign beneficiaries, but the claim process and tax implications may be more complex.
U.S. life insurance payouts are generally not subject to U.S. income tax, but policyholders should consult with a tax advisor about potential tax obligations in their home country or the U.S.
It depends on the policy. Some insurers may accept medical exams performed abroad, but others require an exam in the U.S.
There’s no standard duration, but insurers usually look for signs of stable residency, like employment, property ownership, or long-term visas.
Yes, most policies include worldwide coverage, but it’s important to disclose frequent international travel during the application process as it can affect risk assessment.
Policies may remain valid, but you should notify your insurer of any changes in residency. Some policies may have exclusions or modifications based on your new country of residence.
Generally, the application process must be started while you are in the U.S., although some steps might be completed from abroad.
Some insurers offer policies specifically designed for foreign nationals without the requirement of U.S. residency, but these are less common and may have different terms.
Green card holders often find it easier to get life insurance since they have permanent resident status, reducing the insurer’s risk associated with potential relocation.
Challenges include proving U.S. residency, the complexity of underwriting processes involving international factors, and potential language barriers.
Premiums and payouts are in U.S. dollars, so exchange rates can affect the cost for the policyholder and the amount beneficiaries receive abroad.
Yes, foreigners often use U.S. life insurance for estate planning, especially to provide liquidity for U.S.-based assets. It’s advisable to consult with a financial advisor for such purposes.
An HMO is a type of health insurance plan that typically limits coverage to care from doctors who work for or contract with the HMO. It generally won’t cover out-of-network care except in an emergency.
A PPO is a type of health insurance plan that offers more flexibility when picking a doctor or hospital. They typically offer a network of providers, and you pay less if you use doctors, hospitals, and other healthcare providers that belong to the plan’s network.
An HDHP is a health insurance plan with lower premiums and higher deductibles than a traditional insurance plan. HDHPs are often paired with a Health Savings Account (HSA) to pay for certain medical expenses.
An HSA is a tax-advantaged savings account available to those enrolled in a high-deductible health plan (HDHP). Funds contributed to an HSA aren’t subject to federal income tax at the time of deposit and can be used for qualified medical expenses
Out-of-network refers to providers or healthcare services not covered by your insurance plan’s network. Using out-of-network services usually results in higher out-of-pocket costs.
A pre-existing condition is any health issue that existed before the start of a health insurance policy. Under current laws, health insurance companies can’t refuse to cover you or charge you more just because you have a pre-existing health condition.
A network is a group of doctors, hospitals, and other healthcare providers that have agreed to provide medical care to the insurance company’s customers for a lower cost.
In-network refers to using doctors and providers that are part of your health insurance’s network, often resulting in lower costs for services.
In-network refers to using doctors and providers that are part of your health insurance’s network, often resulting in lower costs for services.
No, typically you need to sign up during an annual open enrollment period, unless you qualify for a Special Enrollment Period due to a life event like marriage, birth of a child, or loss of other coverage.
A copay is a fixed amount you pay for a health care service, usually when you receive the service. It’s one of the ways that health insurers will split costs with you after you hit your deductible.
Coinsurance is your share of the costs of a health care service, calculated as a percent of the allowed amount for the service. You pay coinsurance plus any deductibles you owe.
In a family health insurance plan, a family deductible is the total amount that must be paid out-of-pocket by the family before the insurance company begins paying for their health expenses.
A formulary is a list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits.
Yes, health insurance premiums can be tax-deductible. If you’re self-employed, you can deduct 100% of your health insurance premiums from your taxable income
Individual health insurance is a policy you buy on your own, while group health insurance is a policy offered through an employer or an organization.
An EOB is a statement from your health insurance company providing details on what it will cover for a medical service you received.
Balance billing occurs when a provider bills you for the difference between the provider’s charge and the amount your insurance pays. This is more common with out-of-network providers.
The Affordable Care Act, also known as Obamacare, is a health care reform law enacted in March 2010. The law includes a variety of provisions that expand access to health insurance, increase consumer protections, emphasize prevention and wellness, improve quality and system performance, expand the health workforce, and curb rising health care costs.
Medicare is a federal program providing health coverage for people 65 or older or with certain disabilities. Medicaid is a state and federal program offering health coverage to low-income individuals and families.
Medicare Part A covers hospitalization, Part B covers medical insurance, Part C (Medicare Advantage) offers alternative ways to receive Medicare benefits, and Part D covers prescription drugs.
Yes, individuals who qualify for both programs are known as “dual eligibles” and can receive benefits from both Medicare and Medicaid.
Eligibility for Medicaid depends on income level, family size, and other factors. Eligibility criteria vary by state.
Medicaid generally covers hospital stays, doctor visits, long-term medical care, preventative care, and more, varying by state.
Yes, you can have private insurance and still qualify for Medicaid, which can provide secondary coverage
You can apply for Medicare through the Social Security Administration, either online, by phone, or in person at a Social Security office.
Medigap is private insurance that helps pay some of the healthcare costs that Medicare doesn’t cover, like copayments, coinsurance, and deductibles.
Prescription drug coverage is provided under Medicare Part D and some Medicare Advantage plans.
Medicare Advantage Plans are an alternative to Original Medicare (Part A and B), offered by private companies approved by Medicare. They often include coverage for areas not covered by Original Medicare, like vision, hearing, and dental services.
Yes, if you do not meet the state’s eligibility criteria, which can include income limits, residency, and U.S. citizenship or qualifying immigration status.
During this period, Medicare beneficiaries can change their Medicare health plans and prescription drug coverage for the following year. This gives them a chance to review their current plan and make adjustments if needed.
CHIP provides low-cost health coverage to children in families that earn too much money to qualify for Medicaid but not enough to afford private coverage.
Original Medicare does not typically cover routine dental or vision care. Some Medicare Advantage Plans (Part C) may offer these benefits.
Medicaid waivers allow states to offer services that are not typically covered under Medicaid, such as long-term care for the elderly or individuals with disabilities.
Income limits vary by state and are based on a percentage of the Federal Poverty Level, considering family size and composition.
Original Medicare generally doesn’t cover care received outside the United States, with some exceptions. Medicare Advantage Plans may have different rules for travel coverage.
Yes, certain Medicaid programs may have varying eligibility requirements based on regional factors within a state.
Original Medicare doesn’t cover hearing aids, but some Medicare Advantage Plans may offer hearing benefits. Medicaid coverage for hearing aids varies by state.
If you have Medicare and employer insurance, one will be the primary payer, and the other will be secondary. The primary payer pays first, and the secondary payer covers some or all of the remaining costs.
If you don’t sign up for Part B when you’re first eligible, you might have to pay a late enrollment penalty for as long as you have Part B.
Medicaid can sometimes be retroactive to cover medical expenses incurred up to three months prior to the month of application, if you were eligible during that period.
The Special Enrollment Period is a time outside the regular enrollment periods when you can sign up for Medicare, usually triggered by certain life events like losing other health coverage.
Medicare Part B covers certain preventive vaccines, like the flu shot, pneumococcal shot, and Hepatitis B shots under certain conditions.
IRMAA is an extra charge added to your Medicare Part B and Part D premium, based on your higher annual income.
Yes, during certain times of the year, like the Annual Election Period or during Special Enrollment Periods.
Yes, during certain times of the year, like the Annual Election Period or during Special Enrollment Periods.
Accident insurance provides a cash payout if you suffer from a specific type of injury or accident. It covers expenses like medical bills, lost income, transportation costs, and child care expenses incurred due to the accident.
No, accident insurance is a supplement to health insurance. It provides additional coverage for accident-related expenses not covered by your regular health insurance.
Yes, many accident insurance policies cover sports injuries, but it’s important to check if there are exclusions, particularly for high-risk or professional sports.
Accident insurance benefits are typically paid directly to you and can be used to help with deductibles, copays, or other out-of-pocket expenses your health insurance doesn’t cover.
Some accident insurance policies may have a waiting period before coverage starts. It’s important to check the specific terms of the policy.
Yes, many insurers offer customizable accident insurance policies where you can choose the types of coverage and benefit levels that best suit your needs.
Claim payment times vary by insurer, but many strive to pay out claims quickly, often within a few days of receiving all necessary documentation.
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