NU Online News Service, Oct. 20, 2004, 3:20 p.m. EDT
As president, John Kerry might be a little better for the fortunes of the life insurance industry than would George W. Bush, an industry analyst concludes.[@@]
“Bush endorses tax incentives that could weaken the appeal of life insurance and annuities,” says Andrew S. Kligerman, UBS Warburg LLC, New York. “Kerry’s agenda on taxes, which is narrower in scope, would preserve the industry’s competitive advantage.”
Bush’s proposal to repeal the estate tax permanently, which Kerry opposes, is a threat to sales of life insurance, which is often used to help heirs pay off estate taxes, Kligerman says.
Still, the analyst doesn’t see much chance of a permanent repeal even if Bush is reelected. It’s just too expensive and is opposed by too many Senate Republicans, he says.
President Bush also has proposed two tax-advantaged savings plans that could hurt sales of annuities, while Kerry would likely steer clear of both, Kligerman believes.
But Bush’s lifetime savings accounts, which would negatively affect annuity sales the most, is not likely to pass Congress, while the other plan, retirement savings accounts, probably wouldn’t have much of an impact, he adds.
Both candidates generally support another proposal that could the industry a boost: tax deductions for annuity payouts and long term care insurance. But each side disagrees on the cost and timing of their proposals, the analyst notes.