Policies issued by American General Life Insurance Company
Foreign National Marketplace
[Presenter’s Name]
[Email]
[Phone]
FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Why AIG?
Chronicling
over 95 years
 Began in 1919 as American Asiatic Underwriters in Shanghai, China
 1930-39: Operations expand in China and operations begin in Latin America
 1940-49: New Markets including Japan and Germany
 1950-59: UK and Australia markets opened
 1960-69: American International Group formed
 1990: AIG returns to its roots in China with the issuance of the first foreign license
issued by the Chinese Government in 40 years
 2013: AIG entered a joint venture with PICC Life to provide Chinese consumers life
insurance and other financial products to enhance and protect their overall quality of life
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Why Consider
the Foreign
National
Market?
 Technology has made
the world smaller
 Large, growing population
 Foreign Nationals face unique
U.S. planning challenges
 Significant need for
information on strategies
and planning
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Foreign Nationals need YOU!
 AIG will prepare you for a growing
opportunity with the foreign national market
segment that purchased $92 Billion of real
estate in 20141
 Foreign Nationals come to the U.S. for
mature insurance and investment
markets seeking estate planning help
 Their mean home price is $396,180
versus $247,417 for U.S. Existing Home
Sales
 Some global jurisdictions offer negligible or
no Life Insurance options. The U.S. is an
attractive insurance marketplace.
Source: 1) 2014 Profile of International Home Buying Activity, Realtor.org, Lawrence Yun, Senior Vice President & Chief Economist
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Look at the numbers…
The Largest
U.S. Asian Groups
Asian Americans
 Buying power projected to be $1
trillion by 2017
The six largest country of origin
groups each number more than a
million people
 45% currently WITHOUT Life
Insurance
 8 in 10 Value Life Insurance
 Median Household income of
$72,528 (15% higher than the
overall U.S. median.
 High rate of business ownership
Source of Slide: Pew Research Center analysis based on Elizabeth M. Hoeffel et al., The Asian Population: 2010, Census Bureau, March 2012.
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People are People
No matter your origin…people have the same needs…
 Concerns are the same
– Pass wealth to the next generation
– Protect their Family
72%
– Replace income
Of retirees say serious health
problems are the #1 worry about
living a long life.
Americans’ Perspectives on New Retirement Realities and the
Longevity Bonus, a 2013 Merrill Lynch Retirement Study,
conducted in partnership with Age Wave
– Protect wealth
NCOA.ORG/IMPROVE – HEALTH/CENTER-FOR-HEALTHYAGING/CHRONIC-DISEASE. SEPTEMBER 2014
CIRC.AHAJOURNALS.ORG/CONTEN
T/ EARLY/2013/12/18/01.
CIR.0000441139.02102.80 2013
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But Foreign Nationals
are treated differently…
 Foreign National have additional Concerns
– Tax law is different from U.S. Citizens
– Substantial Tax Risk
– Gifting
– U.S. Insurance Market is mature
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Foreign National Marketplace
“Life Knows No Boundaries”
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Where are Foreign Nationals?
Seattle
Boston
Minneapolis
Sacramento
Philadelphia
New York
Detroit
Denver
Las Vegas
+86%
Colorado Springs
Washington, DC
+92%
Los Angeles
+82%
Phoenix
+99%
Atlanta
Dallas – Fort Worth
+85%
Orlando
Tampa
Houston
West Palm
Beach
Sarasota
Miami
(1) Migration Policy Institute, “Frequently Requested Statistics on Immigrants and Immigration in the United States.” Migration Policy
Institute, Feb. 26, (2) Geoscape national DMA report 2013, The foreign-born population includes anyone who was not a U.S. citizen or a U.S.
national at birth. This includes respondents who indicated they were a U.S. citizen by naturalization or not a U.S. citizen. (U.S. Census
9
Bureau, American Community Survey 2007 Subject Definitions).
FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Understanding Needs
Foreign Nationals fall
into two categories:
Resident Aliens
Non-Resident Aliens
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Resident
Aliens (RA)
Foreign National with a permanent U.S. home.
Worldwide assets subject to U.S. estate
and gift tax
Denied certain tax advantages available
to U.S. citizens
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Non-Resident
Aliens (NRA)
Foreign National with a permanent home in
another country.
Only U.S. assets subject to U.S. estate
and gift tax
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Determining
Residency
Status
 Are you and your spouse
U.S. Citizens?
 Where do you spend
most of your time?
 Where do you consider
home to be?
 Do you own a home
in the United States?
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
What is my status for U.S. income tax purposes?
Do you possess an alien registration card (green card)?
Yes
No
Were you physically present in the U.S. on at least 31 days during the current year?
Yes
You are a
resident
alien (RA)
for U.S.
income tax
purposes
No
Were you physically present in the U.S. on at least 183 days during the 3-year period
that includes all days in the current year, plus 1/3rd the number of days in the prior
calendar year, plus 1/6th the number of days in the 2nd previous calendar year?
Yes
No
Do you still meet the 183 day test if you disregard exempt days?
Exempt days are days you are: (1) commuting to work from Canada or Mexico; (2) in
the U.S. for less than 24 hours; (3) in the U.S. as a crew member of a foreign vessel;
(4) unable to leave the U.S. due to a medical condition; (5) an exempt individual.
Yes
You are a
nonresident
alien (NRA)
for U.S.
income tax
purposes
No
Were you physically present in the U.S. on at least 183 days during the current year?
Yes
No
During the current year, did you maintain a tax home in a foreign country in which
you had a closer connection than with the U.S.?
No
Yes
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Non-resident Alien (NRA) Underwriting Guidelines – Permanent Insurance Only
Is the prospect a non-resident alien?
(A non green card holder residing outside the U.S. or visiting the U.S. temporarily)
Yes
Prospect
may be
Eligible for
Coverage
(additional
requirements
must be
satisfied)
No
Does the prospect have documented
substantial contacts with the U.S.?
Yes
No
Is prospect a visa holder intending to
reside in the U.S. permanently?
No
Prospect
is not
Eligible for
Coverage
Yes
Is the prospect in the U.S. for a purpose other than to buy insurance and has a U.S.
bank account?
Yes
No
Does the prospect meet one of the following requirements?
(1) Own real property in the U.S.; (2) Has ongoing business activities in the U.S.; (3)
Maintain investment interest in the U.S.; (4) Employed by a U.S. based company; (5)
Annual travel to the U.S. to visit immediate family; (6) Annual travel to the U.S. to
manage financial or real estate assets; (7) Regular travel to the U.S., at least 15 days
minimum, for doctors visit.
Yes
No
Yes
Did all solicitation take place in the U.S.?
No
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Resident
Aliens
Worldwide assets
subject to U.S. gift and
estate tax
 Estate and gift tax exclusion:
$5,430,000
 Annual gift tax exclusion:
$14,000 ($147,000 for noncitizen spouse)
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Non-Resident
Aliens
U.S. situs property
subject to U.S. gift and
estate tax
 Gift tax on gifts of real or
tangible personal property
located in the U.S.
 Estate tax on tangible and
intangible property situated in
the U.S.
 Estate tax exclusion: $60,000
 No unlimited marital deduction
for non-citizen spouse
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
U.S. Estate Tax Comparison
Resident Alien
(RA)
Non-Resident Alien (NRA)
$5,430,000
$60,000
40%
40%
Only if inherited
assets are transferred
to QDOT
Only if inherited
assets are transferred
to QDOT
All worldwide assets
Property situated or deemed
situated in the U.S.*
Gift tax annual exclusion
amounts
$147,000 for RA spouse and
$14,000 for non-spouse
$147,000 for NRA spouse and
$14,000 for non-spouse
Assets subject to U.S. gift
taxes
All worldwide assets
Real or tangible personal property
situated in the U.S.
Lifetime estate
tax exemption
Top estate and gift tax rate
Unlimited
marital deduction
Assets subject
to U.S. estate taxes
*U.S. situated property include: real and tangible personal property located in the U.S. as well as certain intangible property deemed situated in the U.S.
(example, stock issued by a U.S. corporation)
Footnote: There are special rules applicable to recent expatriates.
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
U.S. Tax Considerations for
Foreign Nationals
Type of
property transferred
Subject to
U.S. Gift tax
Subject to
U.S. Estate tax
Real property located in U.S.
Yes
Yes
U.S. tangible personal property
(i.e., cash, jewelry, paintings, automobiles)
Yes
Yes
U.S. intangible personal property
(i.e., stocks in U.S. corp., interest
in U.S. partnership)
No
Yes
Ownership interest in a U.S. life insurance policy on
oneself
No*
No
Annuities in U.S. only
No
Yes
Currency in U.S. safe deposit box
Yes
Yes
Cash deposit in bank (checking/savings)
Yes
No
Retirement plan benefits in U.S. only
n/a
Yes
Stock in U.S. corporation
No
Yes
ADRs
No
No
*A gift of a life insurance policy on oneself may be subject to the IRC §2035 look back rule, and therefore may be subject to estate taxes if included
within the decedent’s estate.
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Qualified Domestic Trust
(QDOT)
Additional material you may want to know
FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
QDOT (Qualifying Domestic Trust)
 No immediate estate taxation
 Assets “stuck” in U.S.
 Distributions limited to income and hardship
OR immediate estate taxation
 Need U.S. trustee, may require bond
 Tax liability is not solved upon death of trustee
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Planning and Case Studies*
* The stories are not actual cases, and are hypothetical representations for illustrative purposes only.
FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Case Study 1
Meet Desi and Grace
Will help you understand:
• Non-Resident Aliens
with U.S.-based assets
FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Meet DESI and GRACE
Meet Desi and Grace
Profile:
Desi – Age 58
Grace – Age 56
 Chinese Citizens
 No intent to remain permanently in the U.S.
 Couple recently purchased a home in California for the
benefit of their two children who do intend to permanently
reside in the U.S.
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Upon further inquiry…
Desi Separate Property
• LA Home $3.5M
• Investment Portfolio $2.2M
• Personal Property $300K
Desi and Grace Joint
Property
• Real Property $25M
• Cash and Investments $8M
• U.S. Bank Deposits $500K*
* Note that the $500,000 cash deposit at a U.S. financial institution is not considered U.S. situs property for estate tax purposes.
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Concerns
Total U.S. Assets - $6,000,000
Potential U.S. estate tax liability:
$2,387,000
After application of available estate exemption: $60,000 ($13,000 credit equivalent) 40% tax rate is applied
Net U.S. assets after estate tax: $3,613,000
* Note that the $500,000 cash deposit at a U.S. financial institution is not considered U.S. situs property for estate tax purposes.
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Potential Solution: Secure Lifetime GUL 3
(Guaranteed death benefit to age 121)
Desi buys life insurance policy with guaranteed death benefit:
$3,000,000

Annual premium to be paid by Desi is $44,067*

At Desi’s passing, $3 million is available to offset estate tax liability of $2,387,000
Estate Value (after tax)
Before Life Insurance
After Life Insurance
$6,613,000
$3,613,000
Desi can own the policy individually and name Grace and/or the children
as beneficiary.

Life Insurance proceeds (from U.S. carrier) on the life of a nonresident decedent are not subject
to estate taxes.
•
Exclusion applies even when the policy is directly owned by the nonresident decedent
Premiums paid during lifetime will help reduce the value of the assets subject to estate tax at death.
*Premium based on Male, 58, Preferred Non-tobacco, no-lapse guarantee premium for $3,000,000 level DB
guaranteed to Age 121.
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Case Study 2
Brian, Jennifer and their Three Children
Will help you understand:
• Resident Aliens with significant U.S. and Worldwide Assets
• Married Couples with a Foreign National Spouse
FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Brian,
Jennifer and
their Three
Children
The Family
 Brian (U.S. National) and Jennifer
(Taiwanese National with a green card) –
Multi-National Couple
 Three Children – U.S. Nationality
$25 Million Business
Brian wants to keep the business in the family
and the children to inherit the business
following his and Jennifer’s passing.
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Three Options – One Potential Solution
Following Brian’s death, Jennifer will continue to rely on
the business to support her lifestyle.
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Option 2:
QDOT – Tax deferred until 2nd death
Brian
$5,430,000
Available
Exemption
$19,570,000
Remaining
Assets
Direct Transfer
to Jennifer or
Trust
QDOT
The potential estate tax liability is not solved
but simply deferred until Jennifer’s death.
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Option 3:
Gifts & Life Insurance
Brian gifts
to Jennifer
$94,492* annually
Secure Lifetime GUL 3
Guarantees death benefit of $10 million
$10 Million Death Benefit
 Received free of income and estate tax
 Available to support Jennifer and children
 Provides liquidity to meet eventual estate tax obligation
*Premium based on Male, 50, Preferred Non-tobacco, no-lapse guarantee premium for $10,000,000
level DB guaranteed to Age 121.
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Driving the Opportunity
We are here to help…
FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Next Steps
• Review your book
of business
• Reach out to contacts
that match the client
profile
• Strengthen and build
your referral network
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Look at Your
Existing Business
• Immigrant clients?
• Clients with immigrant spouses?
• Develop a champion client
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Look at Your Neighborhood
• Nearby
colleges/universities?
• Talk to realty firms
for leads
• Nearby hospitals?
• Align with immigration
and/or international tax
attorneys
• Nearby military bases?
• Network with ethnic
business associations
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
APPENDIX
Awareness = Opportunity
Other things to keep in mind
FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Love Knows No Boundaries…
Source: "Legal Hassles of Global Love Affairs” Wall Street Journal, Summer 2013
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Real Estate
International Buyers: 7% of $1.2 Trillion Market
Five Countries: 54 Percent of Total International Sales
Estimate of International Sales from Major Buyers
( In Billion Dollars)
Canada
China
Mexico
India
United Kingdom
Total International Sales
2013
Sales ($) % Share
$11.8
17%
$12.8
19%
$3.6
5%
$3.9
6%
$4.2
6%
$68.2
2014
Sales ($) % Share
$13.8
15%
$22.0
24%
$4.5
5%
$5.8
6%
$5.8
6%
$92.2
Source: “2014 Profile of Intenational Home Buying Activity”, Realtor.org, Lawrence Yun, Senior VP & Chief Economist
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Real Estate
Canada Leads in Number of Transactions
China Leads in Dollar Volume
Distribution of International Transactions by Country of Origin
30%
25%
20%
15%
10%
5%
0%
2010
2011
2012
2013
2014
Brazil
Canada
China*
France
Germany
India
Japan
Mexico
Russia
1%
3%
3%
2%
2%
23%
23%
24%
23%
19%
9%
9%
12%
12%
16%
3%
4%
3%
2%
2%
4%
4%
3%
3%
3%
5%
7%
6%
5%
5%
1%
2%
1%
1%
2%
10%
7%
8%
8%
9%
3%
1%
2%
2%
1%
Source: “2014 Profile of Intenational Home Buying Activity”, Realtor.org, Lawrence Yun, Senior VP & Chief Economist
United
Kingdom
9%
7%
6%
5%
5%
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Real Estate
Foreign Sales tend to be at Higher End of Market
Purchase Price
(Percentage Distribution)
Average Mean and Median Prices from April 2013-March 2014
U.S. Existing Home Sales
International Sales
Mean Price
Median Price
$247,417
$201,700
$396,180
$268,284
Percentage of Respondents With Clients
100%
90%
7%
7%
5%
12%
10%
13%
10%
15%
80%
70%
28%
30%
28%
60%
7%
15%
9%
16%
23%
29%
30%
50%
40%
30%
51%
56%
54%
54%
46%
45%
20%
10%
0%
2009
2010
2011
2012
2013
up to $250,000
$250,001 to $500,000
$500,001 to $ 1M
$ 1M up
Source: “2014 Profile of Intenational Home Buying Activity”, Realtor.org, Lawrence Yun, Senior VP & Chief Economist
2014
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For More Information,
Contact:
[Presenter’s Name]
[Email]
[Phone]
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
Policies issued by American General Life Insurance Company (AGL) except in New York, where issued by The United States Life Insurance
Company in the City of New York (US Life). Issuing companies AGL and US Life are responsible for financial obligations of insurance products
and are members of American International Group, Inc. (AIG). For Policy Forms ICC12 AGLA 12UCG and AGLA 12UCG. Products may not be
available in all states and product features may vary by state.
FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION
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FOR FINANCIAL PROFESSIONAL USE ONLY – NOT FOR PUBLIC DISTRIBUTION