Tax Bills Come And Go, Insurers Say, But VAs Are Here To Stay
Still smarting from a congressional decision to leave variable annuities out of a tax bill that cut taxes on dividends, insurers say they will continue to stress the many features of the product and what they can do.
In mid-May, a $350 billion tax cut that reduces taxes on dividends was passed by Congress (see NU, May 26.)
While interviews with National Underwriter indicate hope that the issue will be revisited, for the time being, the message is that the product offers an excellent way to achieve retirement goals.
While other products will have a tax advantage over VAs, there are benefits that will be discussed with the client including the ability to annuitize, says Tom Shade, senior vice president, product and market development, with AXA Financial, New York. That option will be increasingly important given the growing retirement segment of the population, he continues.
And the need for protection, as embodied in guarantees such as the guaranteed minimum death benefit, is one that consumers want, he adds.
“We have talked to a number of clients and they say it is not a big deal one way or another,” says John Walters, executive vice president and director in the investment products division of Hartford Life Insurance Company, Hartford, Conn.