Life insurance is a necessary component of many estate plans. Life insurance is a tax advantaged product, but favorable laws come at a price.
Insurance Lobbyists on Front Line of US Reforms, an article on Insurance News Net, informs that insurance lobbyists in general -- i.e., not just life insurance lobbyists -- spent $164 million on lobbying in 2009:
In many congressional sessions, insurers focus on small bills, the kind of insider financial legislation that is barely discussed beyond industry circles. But on Capitol Hill now, the attention of insurers is largely on the same major efforts that are drawing the intense interests of politicians and the public.
The organizations that insurers and insurance professionals hire to make themselves heard have a special set of challenges. The groups and the companies they represent spent $164 million on lobbying in 2009. According to the Center for Responsive Politics, insurance is the second-leading lobbying spender.
The article further informs that the Association for Advanced Life Underwriting (AALU) is focused on estate-tax reform:
The Association for Advanced Life Underwriting is focused on estate-tax reform and thinks progress is being made. The next goal is a $3.5 million exemption with a 45% top rate, and if it doesn't happen this year, "Congress will be favorably disposed toward such legislation in 2011," said James E. Lee, vice president of marketing and communications.
AALU’s website announces AALU’s position regarding the federal estate tax:
AALU supports the Obama administration’s proposal of permanent reform with a 45% top rate and a $3.5 million exemption level, $7 million for couples. AALU also endorses a freeze of 2009 levels to combat the 2010 repeal.
Regarding technical provisions, AALU is primarily concerned with the reunification of the estate and gift tax. It is beneficial for individuals and families to make gifts of assets during life rather than at death. Gifting during life ensures a smooth transition and allows elder generations to maintain control while reducing the size of their estates.
The information quoted above is from a web page that is a few months old, but AALU’s position in 2010 is probably similar to what it was in 2009.
For an argument that Congress might be prolonging estate tax uncertainty in a deliberate effort to extract money from lobbyists, see my earlier post, Lobbyists for small businesses change strategy and Congress may simply be "squeezing . . . gold from the goose of wealth transfer tax uncertainty".