Congress Takes Steps To Enhance Retirement Planning
Pension Legislation Provides Incentives to Purchase Long-term Care Insurance
Contact
Lee Allen
Vice President of Communications and Marketing
NAIFA
703-770-8112
Diane Boyle
AHIA
703-770-8252
August 4 , 2006 – Two leading insurance agent groups, the National Association of Insurance and Financial Advisors (NAIFA) and the Association of Health Insurance Advisors (AHIA), applauded the U.S. Senate for following the House of Representatives and passing legislation today that shores up the country’s pension system and “enhances retirement security for more Americans.”
The bill, H.R. 5970, is focused primarily on setting funding rules for pension plans. It also includes a provision—supported by NAIFA and AHIA—that would allow for the purchase of long-term care insurance coverage on a tax-preferred basis by including it in an annuity or a permanent life insurance policy. Under the terms of the provisions, the insurance carrier would charge the cost of the long-term care coverage against the life insurance or annuity cash values. There would be no tax consequences to the policyholders from such a charge to cash values. Additionally, the provisions would permit tax-free exchanges of life insurance and/or annuities for long-term care insurance.
The provision was originally part of H.R. 2830, which passed the U.S. House of Representatives last December. The language was included again in repackaged pension reform bill that the House passed week.
“Both NAIFA and AHIA have long advocated the need for Americans to include long-term care expenses in their retirement planning,” said David F. Woods, CLU, ChFC, LUTCF, NAIFA’s chief executive officer. “The Pension Protection Act calls attention to this important component to retirement planning and provides additional incentives to purchase long-term care insurance and provide lifetime financial security. This is legislation this country desperately needs.”
“House leaders, particularly House Ways and Means chairman Bill Thomas, should be congratulated for recognizing the critical need for long-term care insurance,” Debra C. Newman, CLU, ChFC, LTCP, AHIA’s president. “The provisions in the bill will make long-term care insurance more affordable to more Americans and give them more choice when considering their retirement needs.”
About NAIFA: Founded in 1890 as the National Association of Life Underwriters, the National Association of Insurance and Financial Advisors comprises 800 state and local associations representing the business interests of 225,000 members and their employees nationwide. Members focus their practices on one or more of the following: life insurance and annuities, health insurance and employee benefits, multiline, and financial advising and investments. NAIFA's mission is to advocate for a positive legislative and regulatory environment, enhance business and professional skills, and promote the ethical conduct of its members. NAIFA's website can be accessed at www.naifa.org.