No. The Affordable Care Act (aka ObamaCare ) is on health insurance only. It won't affect life insurance, auto insurance, home owners insurance or anything other than health insurance.
Long term if it causes a lot of frustrated people to jump off bridges or tall buildings it could eventually have an impact on life insurance rates. But so far that frustration has been mainly found in business owners and health insurance agents and has not affected the general public.
We will have to see how things go in 2014 to see if it is truly an AFFORDABLE Care Act.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
At this point in time the ACA (obamacare) does not involve life insurance. That is not to say that at some point in the future life insurance may be tapped for taxes on the inside buildup of cash values to help pay for the ACA which is turning out to be an extremely expensive undertaking. The cash values of life insurance have always had tax favored treatment during the build up phase. So far, those dollars have escaped those in government who seek revenues to fund their projects.
So it is possible that in the future Obamacare will effect life insurance, but more as a revenue source tax wise.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
Does Obamacare effect life insurance? So far, no. But at some point Obamacare and all that it offers, has to be paid for. There is a serious effort in DC to find tax revenue sources and life insurance and annuities are both being eyed for future tax revenues to support the cost of healthcare.
One thing when changes like this happen, and they do happen, what's in force is usually grandfathered and kept exempt from the action. Usually something like this would apply to future purchases. Just another reason not to "round to it. "
Co-Founder, Coastal Financial Partners Group, California
Not directly as it is health care reform. But, life insurance may provide for some planning relief for some higher income taxpayers (250,000+).
In addition to higher income taxes in 2013 for higher income taxpayers, this year also saw new taxes to pay for health care reform due to the 3.8% Medicare Tax on Net Investment Income and the 0.9% Increase in Hospital Insurance Tax on Wages. The 3.8% tax impacts net investment income.
With careful planning, life insurance cash values can be accessed, potentially tax free whereas many other sources of income may be subject to the combination of higher tax rates and 3.8% Medicare Tax.
Obamacare will not effect life insurance, which is sold in the free market and unencumbered by federal intervention. Interestingly, the US Department of Health and Human Services may allow the sale of life and disability insurance at the state exchanges.
The federal deficit on the other hand could force the hand of the government to seek new forms of revenue by removing the tax deferred, inside build up of cash values in life insurance and annuities.
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Long term if it causes a lot of frustrated people to jump off bridges or tall buildings it could eventually have an impact on life insurance rates. But so far that frustration has been mainly found in business owners and health insurance agents and has not affected the general public.
We will have to see how things go in 2014 to see if it is truly an AFFORDABLE Care Act.
So it is possible that in the future Obamacare will effect life insurance, but more as a revenue source tax wise.
One thing when changes like this happen, and they do happen, what's in force is usually grandfathered and kept exempt from the action. Usually something like this would apply to future purchases. Just another reason not to "round to it. "
In addition to higher income taxes in 2013 for higher income taxpayers, this year also saw new taxes to pay for health care reform due to the 3.8% Medicare Tax on Net Investment Income and the 0.9% Increase in Hospital Insurance Tax on Wages. The 3.8% tax impacts net investment income.
With careful planning, life insurance cash values can be accessed, potentially tax free whereas many other sources of income may be subject to the combination of higher tax rates and 3.8% Medicare Tax.
The federal deficit on the other hand could force the hand of the government to seek new forms of revenue by removing the tax deferred, inside build up of cash values in life insurance and annuities.