By Rob Smith, NAIFA Presidentearly response from NAIFA members committed to participate in the April 8-9 Congressional Conference is encouraging. It means that NAIFA members recognize the threat our country’s stark budget and revenue shortfall poses for the tax treatment of life insurance and annuities. We understand that difficult choices must be made and that no sector in the economy is safe from change.
For NAIFA members, change could mean that the tax treatment of core life insurance and annuity products is on the table, as they say in Washington. As never before, members of Congress and their staffs need to hear examples of how agents help 75 million families secure their future using permanent life insurance and annuities.
They also need to hear how the current life insurance and annuities tax structure in place since 1913 has helped fulfill Congress’ public policy goal of promoting financial security. There is likely no empirical study that shows what would happen if the tax structure was changed, although most NAIFA members know intuitively that doing so would be negative. What is known is that prior to 1913, only a small fraction of Americans owned life insurance. Now, 75 million Americans rely on life insurance and annuities. We also know that our industry pays out $1.5 billion daily while Social Security pays out $1.9 billion per day. It is not rocket science to suppose that greater strain would be placed on government safety nets but for the products that allow families and businesses to provide for their own fiscal well-being.
“You can get everything in life you want if you will just help others get what they want.”
- Zig Ziglar
There is an offshoot to the debate over tax treatment for permanent life insurance and annuities that postulates the favorable tax treatment is really just a tax giveaway to the life insurance industry so it can make money. You may hear this on the Hill. Those who hold this view usually have no idea what it takes to “help” people set aside current dollars for future use. And, they are likely never to have heard the late Zig Ziglar’s eternal truth: “You can get everything in life you want if you will just help others get what they want.”
This WIN-WIN-WIN philosophy benefits:
- Our clients, who provide for their own financial futures
- Our government, which can allocate scarce resources to those more in need
- those who make a living in this great business, the people we employ, and the companies we represent.
As a result of what we do more people are employed and are paying taxes, and fewer people are on the government dole, because businesses are continued and families remain intact.
Remember Zig’s thought. It’s OK to do well while doing good. If you haven’t registered for the Congressional Conference, please join your colleagues in April to help Congress understand the good the insurance industry does for 75 million Americans. Visit www.naifa.org/advocacy/caphill today!