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August 26, 2024 at 03:03 PM
Older high-net-worth clients might be starting to pay more attention to the estate tax exemption possibly falling from $27.22 million today to about half that on Jan. 1, 2026.
For U.S. residents 71 and older, individual life insurance application activity was about 19% higher in July than it was in July 2023, according to MIB.
Applicants in the 71-and-up age group were especially hungry for the kind of policies that could be used in high-end estate planning: Their shopping activity for policies with death benefits over $5 million increased more than 100% from the year-earlier level.
Overall activity increased 9.3%.
MIB is an organization that helps life insurers share some of the information used in the life insurance underwriting process. It bases monthly life application activity reports on the volume of policies flowing through its policy-checking systems.
What it means: Whether Congress keeps the current federal estate tax exemption from sunsetting could depend on whether Democrats control the White House, the Senate and the House in 2025 or whether Republicans do so.
One possibility is that older consumers’ interest in big life insurance policies could be a sign that they are watching the general election campaign news and thinking that the odds that the current exemption will sunset have increased.
