Filed Under:Life Insurance, Life Planning Strategies

BMO experts: Fiscal cliff will yield dividends for life industry

Photo credit: Stuart Miles
Photo credit: Stuart Miles

Anticipated end-of-year tax increases, though bad for the economy, will be a positive for life insurance and financial service professionals advising clients on tax avoidance strategies.

So noted a team of experts with Toronto-based BMO Financial Group, which hosted a conference call on Wednesday for journalists to explore the implications of President Obama’s election victory on Tuesday.

To the extent that investors remain in U.S. stocks, said Ablin, then technology shares are a good bet because this sector is lightly regulated and growing. Given also the administration’s position on a dividends tax— President Obama's 2013 budget proposes bringing tax rates for dividends up to those for ordinary income, which would result in a tax rate of about 40% for the highest-income groups—technology shares will, among the sectors, “likely be least impacted by any policy change.”

Busch noted that insurance companies, hospitals, makers of generic pharmaceuticals are “winners” under the Affordable Care Act because of the expected increase in sales for these companies. Other companies that stand to benefit from the administration’s policies include makers of biofuels and autos.

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Nichole Morford

Nichole Morford
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