HR1 creates a solid window of opportunity for life-insurance strategies, NAIFA Trustee Andrew Rinn writes in an article published in Advisor Magazine. “After years of watching tax policy evolve and wondering what comes next, we now have a roadmap and a fresh window of opportunity – and life insurance is a big part of that,” Rinn writes.

With the federal estate and gift tax exemption now set at $15 million and indexed for inflation, advisors can help clients plan with greater confidence, Rinn writes. This stability reinforces the continued relevance of tools like ILITs, SLATs, and IDGTs, especially when paired with life-insurance solutions that provide liquidity, protect family businesses, or ensure fair and efficient wealth transfer.

Rinn also highlights how HR1 strengthens planning opportunities for business-owners and high-income professionals. From executive bonus designs to split-dollar arrangements and nonqualified deferred compensation, the legislation offers clearer rules and renewed flexibility for those looking to structure compensation or enhance retention packages. For nonprofit executives, where compensation is under increasing scrutiny, Rinn points out that properly designed life-insurance-based strategies can play an essential role in meeting organizational and regulatory requirements.

Another key insight from the article is the bill’s potential to expand after-tax cash-flow strategies for pass-through entities. With HR1 reinforcing certain tax advantages, advisors can help clients leverage permanent life-insurance solutions to smooth cash flow, build supplemental retirement income, or protect key employees.

The clarity provided by HR1 isn’t just a tax update, it’s a call to action, Rinn says. For advisors, now is the moment to revisit client strategies, identify new opportunities, and ensure families and businesses are positioned to benefit from a more predictable planning environment.

DISCLOSURES

1. 26 U.S. Code § 2020 – U.S. Government Publishing Office. https://www.govinfo.gov/content/pkg/USCODE-2020-title26/html/USCODE-2020-title26-subtitleB-chap11-subchapA-partII-sec2010.htm
2. Senate Amendment to H.R. 1, 199A -- https://www.govinfo.gov/content/pkg/BILLS-119hr1eas/pdf/BILLS-119hr1eas.pdf
3. Senate Amendment to H.R. 1, Section 4960 -- https://www.govinfo.gov/content/pkg/BILLS-119hr1eas/pdf/BILLS-119hr1eas.pdf
4. R. 1, Section 179 -- https://www.congress.gov/bill/119th-congress/house-bill/1/text/enr
5. Senate Amendment to H.R. 1, Section 1(j) and 164(b)(6) -- https://www.govinfo.gov/content/pkg/BILLS-119hr1eas/pdf/BILLS-119hr1eas.pdf

Neither Midland National nor its agents give tax or legal advice. Please advise your customers to consult with and rely on a qualified legal or tax advisor before entering into or paying additional premiums with respect to such arrangements.

Under a split dollar arrangement, the employee enters into an agreement with their employer. Midland National is not a party to this agreement and Midland National’s only obligation is to administer the policy it issues consistent with the policy’s terms and conditions.

As independent financial professionals, it is up to you to choose whether any of the sales concepts contained in these materials might be appropriate for use with your particular sales strategy and clients. Please note that Midland National does not require you to use any of these sales concepts; they are resources that can be used at your option for your own individualized sales presentations if appropriate for the particular client and circumstances.

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