Life Insurance, Annuities, Disability & LTC After the OBBB Act
- LIR TEAM
- Aug 2
- 6 min read
Why You Must Be Cautious When Agents Pitch Insurance Products as "Planning Tools"
At LifeInsuranceReview.com (LIR), we exist because the life insurance and financial product industries are riddled with misaligned incentives. Agents, brokers, and financial advisors are often rewarded for what they sell — not how they serve.
And with the newly enacted One Big Beautiful Bill Act (OBBB Act) drastically reshaping the tax and financial landscape, the pressure to "sell something" has only increased.
Consumers are now being pitched life insurance, annuities, long-term care, and disability insurance as the answer to every planning problem — often without understanding the costs, limitations, and alternatives.
🔍 The OBBB Act: What's New & Why It Matters
Signed into law on July 4, 2025, the OBBB Act reshapes the financial planning environment with changes that affect taxes, retirement, estate planning, education, and business owners.
But while the law creates more financial flexibility for consumers, it also creates more sales angles for insurance agents, especially those who are not fiduciaries.
Let’s break it down.
🧾 Key Provisions of the OBBB Act Impacting Insurance Planning
💼 Estate Tax Exemption Raised to $15M (or $30M per Couple)
Most high-net-worth families no longer need life insurance solely for estate tax purposes.
No sunset provision: This change provides long-term planning certainty.
If you’re being told to buy a large permanent policy for “estate tax liquidity,” stop and verify whether that advice still holds post-OBBB.
🧓 Senior Deduction & LTC Support
New $6,000 deduction for individuals age 65+ reduces taxable income (phased out at $75K/$150K AGI).
Dependent care FSA limit increased from $5,000 to $7,500 starting 2026 — opening new ways to fund long-term care.
Some agents may now try to spin these provisions into selling LTC riders on life insurance or annuities — without comparing them to stand-alone LTC coverage or new tax-advantaged savings strategies.
🎓 Education & Minor Accounts
529 distributions for K–12 expenses doubled to $20,000.
New “Trump Accounts” (minor IRAs) give young savers $1,000 seed money + $5,000 annual limit.
This reduces the need to use whole life or IULs as savings tools for kids — a common and risky sales tactic.
💸 Income Planning Provisions:
Above-the-line deductions for overtime, tips, auto loans
Expanded 199A deduction and new QSBS rules
No change to step-up in basis — helping reduce artificial tax-driven planning
❗️The Products Consumers Are Now Being Pitched More Than Ever
In the wake of the OBBB Act, here’s what we’re seeing on the ground:
🔴 Cash Value Life Insurance
Pitched as “tax-free retirement” or “legacy protection.” But…
High internal costs
Underperforming index options
Complex surrender charges
Often sold using unrealistic illustrations
Roughly 9 out of 10 IUL policies we review underperform their illustrations — often by a wide margin.
🔴 Annuities (Especially Indexed and Variable)
Pitched as “guaranteed lifetime income” or “market upside with no downside.” But…
Locked up for 7–10+ years
Capped, spread, and participation rate limitations
Huge surrender penalties
Aggressively commissioned
🔴 Disability Insurance
Often recommended in high-income professions — which is good — but:
Many policies sold exclude partial claims or bonus income.
Some group LTD policies are over-relied on despite poor definitions of disability.
Riders sold are expensive and rarely explained properly.
🔴 Long-Term Care Insurance (LTC)
You may be pitched:
Hybrid LTC riders on life insurance or annuities
Return-of-premium or “linked benefit” products
But beware:
True long-term care coverage is often more comprehensive through stand-alone policies
Riders may limit daily benefit caps, inflation options, and duration
Too often, these riders are sold as a way to justify buying an expensive life insurance or annuity contract, rather than evaluating true LTC needs.
✅ The Real Planning Opportunity (Without Being Sold)
If you are:
Nearing or in retirement…
A business owner reviewing buy-sell or executive benefit plans…
A parent or grandparent concerned with education or estate planning…
A professional being pitched permanent insurance or annuities…
Then you need advice — not a sales presentation.
At LifeInsuranceReview.com, we provide independent, fiduciary policy and contract reviews, without bias or conflict of interest.
🔎 Key Questions to Ask Before Buying Insurance or Annuities Post-OBBB Act
Is this product being sold to solve a real financial problem — or to generate a commission?
Do I understand all the moving parts, limitations, and fees?
Have I seen comparisons to other types of coverage, or just what the agent is licensed to sell?
Has this advice been reviewed by someone with no financial interest in the sale?
🛡️ Who’s on Your Side?
At LIR, we are:
Not affiliated with any insurer or product
Not compensated for selling anything
Licensed analysts and fiduciary professionals
Dedicated to one goal: helping you make the most informed, conflict-free decision possible
🟢 Get the Full Picture — Before You Buy or Keep a Policy
Whether it’s:
A cash value life insurance policy you’re being pitched…
An annuity someone says you “need for guaranteed income”...
A disability or LTC policy that seems vague or confusing…
👉 We will give you a transparent, thorough, and unbiased review.
👉 We’ll uncover the fine print and show you what the salesperson isn’t telling you.
✅ Schedule Your Fiduciary Review Now
Visit LifeInsuranceReview.com to protect yourself from being sold — and start making empowered decisions that put your needs first.
🔍 Frequently Asked Questions (FAQs)
About Life Insurance, Annuities, Disability & LTC After the OBBB Act
1. Has the OBBB Act changed whether I need life insurance for estate planning?
Yes. The estate tax exemption is now $15 million per person ($30 million per married couple) and doesn’t sunset, meaning most families no longer need life insurance just to cover estate taxes. Many agents still sell policies based on outdated strategies — get a fiduciary review first.
2. Are cash value life insurance policies still a good tool for retirement planning?
Not for most people. These policies (like Whole Life and Indexed Universal Life) are often sold as “tax-free retirement” tools, but the costs, caps, and performance issues are rarely disclosed clearly. 8 or 9 out of 10 that we review underperform vs. what was sold.
3. What’s the biggest issue with annuities today?
Annuities — especially indexed annuities — are commonly pitched as “safe growth” or “guaranteed income,” but they often come with:
Complex crediting formulas
Low real returns
Limited access to your money (surrender penalties)Worse, many advisors push them because of high commissions, not client fit.
4. I’m self-employed or a high-income earner — should I buy disability insurance?
Maybe — but don’t rely solely on what’s being sold to you. We see many disability policies exclude bonuses, offer weak definitions of disability, or lack residual (partial) protection. A proper needs-based analysis is critical — not just a quote from a captive agent.
5. Is it better to get long-term care insurance through a rider or a standalone policy?
Standalone LTC insurance generally provides more comprehensive and flexible coverage. LTC riders on life insurance or annuities can be useful in certain cases, but are often added just to justify a product sale. We compare both options and break down the differences.
6. How do I know if my advisor is a fiduciary or a salesperson?
Ask:
Do they earn commissions from products?
Are they affiliated with a particular insurance carrier or marketing group?
Will they put their fiduciary duty in writing?
If they can’t answer clearly — they're likely selling, not advising.
7. Can I still use life insurance to fund education or college savings?
It’s almost never the best tool for that anymore. The OBBB Act expanded 529 plans (up to $20,000 for K–12 and broader postsecondary uses), and new minor IRAs (“Trump Accounts”) now offer tax-advantaged savings. Insurance as a savings plan is a sales gimmick more than a sound strategy.
8. Should I replace my existing policy or annuity now that laws have changed?
Only after a full review. Many agents are trying to “churn” clients into new policies under the pretense of “OBBB tax optimization.” In reality, you could be worsening your position. We help consumers evaluate if a 1035 exchange or policy change is actually in your best interest.
9. My agent showed me an illustration with great numbers. Can I trust it?
Be cautious. Life insurance and annuity illustrations often assume unrealistic growth, exclude internal costs, or hide risks in the footnotes. At LIR, we stress-test illustrations and model lower-return, real-world scenarios so you know what to expect.
10. How does LifeInsuranceReview.com work and what does it cost?
We’re independent and fee-based — not tied to any insurance company.You pay us for a comprehensive policy or annuity review, and we give you a clear, jargon-free report on what you own or are being sold.No sales. No upsells. Just the truth.
