Congress is looking to extend expiring provisions of the Tax Cuts and Jobs Act – which include reduced individual tax rates and a 20% deduction of qualified pass-through income for sole proprietorships, partnerships, and S-corporations – while at the same time creating new tax cuts President Donald Trump promised during his campaign. The Congressional Budget Office projects that extending the TCJA alone will cost around $4.6 trillion over 10 years. Lawmakers and the administration are looking to cover the cost by finding new sources of revenue and government spending cuts. We would be naïve to think the insurance and financial services industry will escape scrutiny.
Members of Congress need to understand that the products and services provided by insurance and financial professionals are part of the solution. Tax laws and other policies that encourage Americans to take control of their own financial well-being, plan for retirement, and mitigate life’s inevitable risks strengthen the economy and can reduce government spending. Insurance products and services also improve Americans’ quality of life by providing financial security and reducing financial worries. The results of two surveys, one by LIMRA and Life Happens and the other by ACLI, illustrate the points.
Without insurance products, American families would be much more likely to struggle financially and more reliant on costly government programs. According to the ACLI report Insurance Benefits and Government Spending:
- Annuity products providing guaranteed income in retirement allow seniors to delay claiming Social Security benefits, thereby saving the government more than $100 billion over time as Baby Boomers retire.
- Long-term care insurance will reduce government Medicaid expenses by around $14 billion over 10 years.
- Disability insurance will reduce Social Security Disability Income expenditures by around $8 billion over 10 years.
LIMRA and Life Happens found that 44% of Americans are concerned that they may not have enough money for a comfortable retirement, according to the 2024 Insurance Barometer Study. This concern is most acute Millennials (54%) and Gen X (48%). Survey respondents’ other top financial concerns include not being able to support themselves if they cannot work due to disability or illness and inability to pay for long-term care if it is needed.
Insurance can help alleviate many of these worries and reduce pressure on government to fill the gaps. Insurance and financial professionals are highly effective advocates for their businesses and clients as well as consumers in general. Very few members of Congress are experts on financial and insurance matters so they appreciate hearing from constituents who are in the industry. Every agent and advisor has stories, similar to Life Happens’ Real Life Stories, that illustrate the positive impact they have on clients and their families.
This May 19-20 NAIFA will convene its annual Congressional Conference, bringing hundreds of financial professionals from all 50 states to Washington, D.C., to meet with their Representatives and Senators. All financial professionals are invited to join us and learn how to be an impactful advocate, receive important policy briefings, and share our message with lawmakers on Capitol Hill. Your expertise and stories can make all the difference in ensuring that policy decisions continue to encourage the public to secure their own financial futures.
