You’re young. Life is good and you are settling into your new role as a parent and, quite possibly, the sole provider for your young family and dependents. As your thoughts turn to the future, it only makes sense you want to secure the prosperity and financial security of your young family if anything happens to you and you’re not there to see them through into that future. Protecting your family (and yourself) through a life insurance policy is pretty much a no-brainer. But have you considered an offshore policy? Since an offshore life insurance policy isn’t considered an investment it isn’t subject to taxes. The bonus of this is you can save a substantial amount on inheritance taxes. Opt for an IRS compliant offshore life insurance policy and your investment will also be protected from federal taxes. A bonus of an offshore life insurance policy compared to other standard onshore policies is that investments like hedge funds, stocks or real estate can all be included in an IRS compliant (read ‘tax-efficient’) offshore policy. This means your invested wealth will go to your heirs through your life insurance, reducing the cost of estate tax and income tax burdens for them.
The search for a standard life insurance policy is complicated and difficult enough. If your family is financially dependent on your income it only makes sense to make sure they are protected as well as they can be. But, really, what about an offshore policy? An investment in an offshore life insurance policy is exempt from taxes, meaning they will get a larger benefit from the policy. There are criteria you’ll have to meet to find an offshore policy to meet your family’s needs when you’re gone.
An offshore life insurance policy is an option for anyone regardless of their native country. The disadvantage to establishing the policy itself is the fact it will need to be done entirely within the policy’s country of origin. This means you will need to do some traveling. Openly and honestly discuss your policy options with your financial advisor before making any offshore life insurance policy investment. Any financials required for the underwriting will need to be verified through an attorney, banker or accountant.
Speaking of financials, you will need to have a net worth of at least $1 million or earn more than $200,000 annually to be considered a suitable candidate for an offshore policy. As with any life insurance you will need to pass a thorough medical exam as part of the underwriting process. All of the tests and other qualification standards will need to be performed outside of the United States as well.
Searching and finding an offshore life insurance policy means you may be opening yourself and your privacy more than you are completely comfortable with. Really, though, if it’s within your financial means to do so you will find it is a reasonably preferable alternative to a standard, onshore life insurance investment.