The following statement may be attributed to U.S. Congressman Michael C. Burgess, M.D. (TX-26) concerning the introduction of his bill, H.R. 377, Insuring Families for Their Future Act on January 10, 2007:

“Families are the cornerstone of our society. It is our families that we turn to in times of joy and times of sorrow. The loss of any family member can be one of the most painful and difficult experiences that anyone can go through. The loss of a parent can be especially devastating for a child.

“The last thing that any family needs to worry about during this time of sorrow is whether or not they will be able to stay together. Yet if the loved one who has passed away is the family's primary income source, this may be very real worry for thousands of families.

“In 1964, Congress acted to protect families in this difficult situation by encouraging employers to provide a certain amount of life insurance coverage for their employees. The Revenue Act of 1964 (P.L. 88-272) allowed employees to exempt the premium costs of their employer-sponsored group term life insurance up to $50,000, but required individuals to pay an imputed income tax on the premium costs over that $50,000 cap.

“The value of the current $50,000 cap has eroded over time because it was not indexed to inflation. If you were to index $50,000 in 1964 to today, you would find that to keep pace with inflation, the current cap should be set at $320,000.

“My bill, H.R. 3777, the Insuring Families for the Future Act would raise the cap to $320,000 and index it to future inflation, thereby encouraging employers to provide a larger life insurance benefit to their employees.

“This legislation will ensure that families can stay together during this time of sorrow.”

H.R. 377, Insuring Families for Their Future Act

Sponsor: Representative Michael C. Burgess, M.D. (TX-26)

Introduced: January 10, 2007

Status: Referred to House Committee on Ways and Means

Why it is needed: Families are the cornerstone of our society. It is our families that we turn to in times of joy and times of sorrow. The loss of any family member can be one of the most painful and difficult experiences that anyone can go through. The loss of a parent can be especially devastating for a child.

The last thing that any family needs to worry about during this time of sorrow is whether or not they will be able to stay together. Yet if the loved one who has passed away is the family's primary income source, this may be very real worry for thousands of families.

In 1964, Congress acted to protect families in this difficult situation by encouraging employers to provide a certain amount of life insurance coverage for their employees. The Revenue Act of 1964 (P.L. 88-272) allowed employees to exempt the premium costs of their employer-sponsored group term life insurance up to $50,000, but required individuals to pay an imputed income tax on the premium costs over that $50,000 cap.

The value of the current $50,000 cap has eroded over time because it was not indexed to inflation. If you were to index $50,000 in 1964 to today, you would find that to keep pace with inflation, the current cap should be set at $320,000.

What it does: The Insuring Families for the Future Act would raise the cap to $320,000 and index it to future inflation, thereby encouraging employers to provide a larger life insurance benefit to their employees.