Research shows that the middle market makes up a large segment of NAIFA members’ clients. This is important for a number of reasons.
First, life insurance is a mainstay of the U.S. economy, providing financial security to 75 million American families and accounting for 20 percent of long-term savings. Many of these are middle-income people looking out for their own financial futures who would otherwise have no alternative but to turn to the government for assistance.
Second, agents’ service of the middle market is the bedrock upon which the federal tax status of life insurance products is built. If Congress were to believe that life insurance is no longer serving its middle-America constituents, that could provide impetus for lawmakers to reexamine laws providing for policies’ tax-free death benefit and tax-deferred cash-value buildup.
This is a main point of a recent LifeHealthPro article entitled “The dangers of ignoring the middle market.”
The article points out that the middle market is buying less life insurance than in the past – some 56 percent of American households have no individual life insurance coverage. The tough economy has played a part in this.
Yet life insurance remains as important as ever for providing financial protection to the middle market. The fact that more families are not taking advantage of these products does not mean that the shouldn't be. Many simply lack a proper financial plan or are not well informed about the importance of life insurance. LifeHealthPro points out that nearly 80 percent of U.S. households have no personal life insurance agent.
NAIFA members will take this message, that life insurance remains as important as ever to middle-market Americans, directly to Congress during the NAIFA Congressional Conference on April 8-9, 2013. Agents will converge on Washington and meet with their lawmakers to drive home the fact that they provide an important safety net for the middle market, and the tax treatment of insurance products is a vital part of that.