If you own a life insurance policy, you are most probably expecting your beneficiaries to receive the death benefit income tax-free. Additionally, if you own a cash-value policy (e.g. whole life or universal life), you’re probably counting on the cash accumulation to grow within the policy on a tax-free basis.
While many Americans have enjoyed this benefit for the past 100 years, our lawmakers’ need to find additional “revenue” once again finds these tax-hungry wolves threatening to huff and puff and blow down this door of protection millions of Americans have benefited from. While there have been similar threats over the years to remove the tax-favored status life insurance policies have been granted, the tax-and-spend frenzy in Washington makes the timing ripe for an attack on these benefits.
Do I think that the current Administration will want to be seen taking benefits away from widows, widowers and children of deceased parents? If the defense of Medicare and Social Security benefits are any indication, I would say definitely not. However, that doesn’t mean that we should let our guard down on this one.
I just visited SecureFamily.org, a website created by Americans to Protect Family Security, a partnership formed by life insurance companies, agents and financial advisors for the purpose of educating policymakers about the reasons families turn to life insurance and annuities to protect their families’ financial futures.
According to this group, these are some ways that life insurers’ products help Americans today:
- 75 million American families count on life insurers’ products for peace of mind, long-term savings and a guarantee of lifetime income when it’s time to retire.
- The life insurance industry pays out $1.5 billion every day through payments from life insurance, annuities and other retirement products, long-term care insurance and disability income insurance.
- Savings in permanent life insurance and annuities represent more than 20 percent of Americans’ long-term savings.
I am in total agreement with this group that public policy should encourage Americans to take responsibility for their financial future – not punish them for doing so. If you agree with this viewpoint and want to help convince our lawmakers that continuing to give favorable tax treatment to key provisions of life insurance policies, visit INNvolved.org and use the resources in their Take Action section where you can find links to get:
- Contact information for your Senators and Representatives.
- Instructions on writing a letter to your Senator or Representative.
- The Petition to Protect Family Security offered by SecureFamily.org.
- An Action Tool Kit
I believe, with the actions of these groups and concerned citizens, we can ward off the wolf one more time. Let’s keep these benefits for the families that depend on them.