WASHINGTON BUREAU — Insurance industry groups say reducing the tax incentives that now encourage Americans to buy life insurance would backfire.

The groups say in a letter addressed to all members of Congress that workers need life USAand annuity products to protect their finances, save for the long term, and guarantee that their retirement income will last until they die.

“We strongly support the goal of addressing the national deficit,” the groups say. “At the same time, we believe it is essential that public policy recognize that more than 75 million American families rely on life insurers’ products.”

The economic crisis has only increased American families’ need for help with bolstering their financial and retirement security, the groups say.

“We strongly believe that public policy must encourage families to take the responsible steps to protect themselves and build savings,” the groups say.

The groups that signed the letter are the Association for Advanced Life Underwriting, Reston, Va.; the American Council of Life Insurers, Washington; GAMA International, Falls Church, Va.; the National Association of Insurance and Financial Advisors, Falls Church; and the National Association of Independent Life Brokerage Agencies, Fairfax, Va.

The groups wrote the letter in response to a draft report posted by the National Commission on Fiscal Responsibility and Reform, a group created by President Obama to look for ways to cut the federal budget deficit.

The draft report includes proposals for increasing the normal Social Security retirement age, changing the mortgage tax deduction rules, eliminating the tax break that encourages employers to contribute to 401(k) plans, taxing some

or all employer expenditures on group health insurance, and applying the same tax rules to cafeteria plans that apply to 401(k) plans.

Another proposal would uncap the disability insurance portion of FICA taxes. The disability insurance portion now amounts to 1.8% of FICA.

To get into the final commission report, a proposal must win the support of at least 14 of the 18 commission members