What is the story about?
What's Happening?
David Chavern, CEO of the American Council of Life Insurers (ACLI), discusses the life insurance industry's pivotal role in providing long-term financial security. As Life Insurance Awareness Month begins, Chavern emphasizes the industry's shift from accumulation to decumulation and wealth transfer, with annuities becoming the fastest-growing product. He highlights the industry's 'superpower' of making long-term promises, offering multi-decade guarantees that banks and mutual funds cannot provide. Chavern also stresses the need for a new vocabulary in Washington to better reflect the industry's offerings, which include income protection, retirement income, disability, and long-term care.
Why It's Important?
The life insurance industry plays a crucial role in managing longevity risk and providing financial security for retirees, especially as defined benefit pensions become less common. The industry's ability to offer long-term guarantees supports both individual financial planning and the broader U.S. economy, with life insurers investing premiums in the economy and being major buyers of corporate bonds. Raising awareness of the industry's broader value beyond funeral expenses is essential for consumers and policymakers to understand its impact on financial stability and economic growth.
What's Next?
ACLI is focused on building a deeper understanding and appreciation of the life insurance industry's value among policymakers and the public. The organization is working to develop a new vocabulary that accurately reflects the industry's offerings and to build a stronger network of champions in Washington. As the industry faces potential tax challenges, ACLI aims to ensure that policymakers recognize the importance of life insurers in managing risk and supporting the economy.
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