Our existing state law protects the cash values inside life insurance and annuities up to certain limits.
Simply put, you can put in $15,000 per year into a life policy or an annuity, and the values that accrue will generally be protected from the claims of creditors. Investment-grade life insurance has constituted a safe and sound foundation for families for over 200 years. SB-348 would remove this limit, giving savers greater protection, and follows the pro-consumer trend that has caused at least 13 other states to pass similar laws.
This law protects spouses, children, other heirs, even charities from having their financial well-being undermined decades after the policy was begun, should a financial institution attempt to recover monies from a debtor whose
intention was to protect his family. The present laws do not encourage fraudulent manipulation, as opponents of this proposed law argue, because thieves (i.e. Madoff types) typically don’t want to wait 20 or 30 years for their financial plans to mature, which is how insurance and annuities traditionally function.
Existing federal laws protect the values inside IRA’s, 401(K) and other deductible retirement plans much more favorably than the laws of Nevada. So citizens of Nevada have a choice:
they can put their retirement nest egg at risk, speculating on generous gains in any particular year, at the same time holding their breath they wont lose half or more of their money if the wrong wind blows – all under the premise that their funds will be protected against creditors.
Alternately, one who desires to adequately fund their retirement or inheritance plan with fixed vehicles such as dividend-paying life insurance, variable life policies, or fixed or variable annuities, will have to settle for much lower protection.
It is noteworthy that the Nevada Senate passed SB-348 with no opposition, 21-0. The bill then proceeded to the Assembly, by way of the Assembly Judiciary Committee, where it was aired for testimony on April 21. I and others testified as to the merits. There was no opposition voiced, however this sensible bill now languishes with no action.
I must conclude the Assembly members feel that “the rich” would benefit from this proposed law more than the average saver, because it has added a 22-page amendment which not only diminishes the bill’s effect, it may make the law unconstitutional, which helps no one but trial lawyers.
If you would prefer to avoid the hazards of the stock market, but choose instead to keep your retirement funds safe and secure, you would support SB-348.
If your political agenda causes you to endorse forces such as tax-increase proponents, trial lawyers and professional politicians, you would oppose it.
SB-348 is a pro-consumer, pro-retiree, pro-saver bill. I ask that the Nevada Assembly pass this bill without amendment, during this legislative session.
I respectfully suggest that anyone who has assets to protect, contact your friends in the Assembly, voice your opinion and ask them to pass SB-348.
5285 South Durango Road, Suite 1
Las Vegas, Nevada 89113
Joe Pantozzi is a 35 year citizen of Nevada and 35-year, fully credentialed financial advisor.
He is an officer of the National Association of Insurance and Financial Advisors (Southern Nevada chapter)