Groups that represent life insurance agents are warning against the dangers of poorly planned efforts to change the tax code.
Executives at the National Association of Insurance and Financial Advisors, Falls Church, Va., and a sister group, the Association for Advanced Life Underwriting, have reacted to this week’s National Summit on Retirement Savings by repeating criticism of Bush administration proposals to revamp tax incentives for saving and investing.
The proposals could replace tax breaks for annuities, life insurance policies, and many types of individual and employer-sponsored retirement accounts with a system of 3 new types of savings accounts.
“The important tax treatment of life insurance and retirement products under current law provides incentives for both individuals and employers to protect and save for their futures,” says AALU Chief Executive David Stertzer. “Any changes contemplated in the tax system related to savings should not threaten the existing tax treatment of products with a proven track record of success.”
“If anything, policymakers should be looking at ways to strengthen life insurance and retirement products, not disadvantage them,” says NAIFA Chief Executive David Woods.
The decline in personal savings and the shift away from traditional defined benefit pension plans make promoting long-term individual savings vehicles more important than ever, Woods says.