I have heard some rumblings through the life insurance industry lamenting the estate tax provisions of the American Taxpayer Relief Act of 2012, signed into law by President Obama on Jan. 2 to avert the fiscal cliff .
The deal permanently set the individual exemption for estate taxes at $5 million, with a top tax rate increasing to 40 percent. Without the deal, the top estate tax rate would have ballooned from 35 percent in 2012 to 55 percent, with just a $1 million exemption. In that event, LIMRA says 12.5 percent of U.S. households would have had potential estate tax liability, and the average tax due for them would be $1.4 million. Yes, that would have meant many of them would have been in the market for life insurance policies for estate planning purposes.