Saturday, November 17, 2007
Life Insurance industry supports "death tax"; Senate tries to help with Long Term Care
The life insurance industry has a dirty little secret out in the open, according to libertarian-leaning columnist Timothy P. Carney (whom I met once at a Cato function, as I remember), with his column Nov. 16, 2007, “Death tax is a lifeline for insurance industry.” The article appeared in The DC Examiner Nov 16 on p 17 under commentary, link here.
There has been a lot of witchcraft (“you create your own reality”) with the death tax, which the Bushies set to disappear in 2010, to reappear in 2011. Relatively few people pay it, but those who are exposed to it spend a lot of money on financial planners (working for insurance companies or brokerage houses) to avoid it. According to the article, the life insurance industry gets 10% of its business this way.
The American Council on Life Insurance (ACLI) reported spent amount $10 million last year on keeping some form of estate tax. ACLI president Frank Keating (no relation to Peter Keating in Ayn Rand’s “The Fountainhead”) suddenly started repeating leftist talk from the collectivist 70s on the moral evils of too much “unearned” inherited wealth staying within families.
In 2005 I was approached about becoming a life insurance agent, since I have twelve years of information technology experience in the area. I did not want to “live the life” (trying to build up lists of leads, and behaving in a publicly partisan manner about certain issues) and I hardly am interested in helping “rich people” get around taxes. I can see a career in helping develop and sell long term care insurance, however.
The ACLI website should be explored for the long term care issue. For one thing, it has a story “Senate Introduces Long-Term Care Affordability and Security Act”, details here. The bill would allow long term care insurance to be included in employer cafeteria plans and flexible spending accounts. The long title of the story is “"Long-Term Care Affordability And Security Act Of 2007" Will Help Americans Prepare For Long-Term Care Needs