AALU/GAMA leverages the collective voice of the financial security profession to amplify the promotion of public policy that encourages life insurance and annuities as part of a holistic financial security plan.
Benefits of Life Insurance Products
Life insurance is one of the best financial protection and long-term savings tools available to families and businesses. By enhancing Americans’ economic security, life insurance products reduce the reliance on federal programs. Only life insurance products protect against an unexpected death or debilitating injury or illness and provide guaranteed income in retirement.
Businesses use life insurance to continue operating efficiently after the death of a key owner or employee, provide smooth ownership transitions, and recruit and retain key employees, and fund important health and retirement benefits.
Ninety million American families rely on life insurance for their retirement security. The life insurance industry is responsible for $20 trillion of financial protection in force and pays out $2.1 billion every day.
Unfortunately, too many Americans are underinsured, about 40% of American families do not have any life insurance coverage. While those families who do have coverage have less than they need. Most experts recommend coverage that is at least seven to ten times annual income.
Importance of Certainty & Predictability
Successfully planning for your financial future and that of your family and business over a lifetime requires certainty. Effective planning also needs predictability that shouldn’t be undercut by recurring changes in the tax code.
In the area of estate and business succession planning, uncertainty with respect to tax rules has been shown to reduce incentives for thoughtful decision making and led to unsuccessful transfers to succeeding generations and problems for the family members, employees, and businesses affected. Frequent changes to the tax regime discourage or disrupt the effective planning currently done to help ensure that businesses, farms, and other assets are passed on and remain viable from one generation to the next.
On the other hand, a reasonable and durable estate tax regime provides the predictability to use effective planning tools that protect the family, the business, and the employees by providing liquidity to manage the transition that must occur when a founder or owner passes, as well as cover applicable taxes.
Regulation of Financial Security Professionals
AALU/GAMA members help individuals and families secure their retirement and maintain financial independence in the face of potential catastrophe. Our members also work with businesses large and small to protect their employees, finance benefit plans, and provide liquidity in a crisis to preserve the business as an ongoing concern.
Financial security professionals currently operate under a robust regulatory regime that includes State Insurance Commissioners, multiple professional licensing organizations, state and federal consumer protection regulators, and federal securities regulators. In addition, they are subject to detailed requirements by the carriers with whom they work and robust internal supervisory procedures by the broker-dealers with which they are affiliated. They also face frequent and comprehensive regulatory examinations by the regulators who exercise jurisdiction over them.
AALU/GAMA member success is derived from building trusted relationships with their clients. We want the best for our clients. However, sometimes misguided regulation can result in limiting the marketplace and cutting off services from those who need financial guidance and product choice the most. It is essential to ensure product choice and access to professional financial advice is not reduced for American families.