[Congressional Record Volume 141, Number 1 (Wednesday, January 4, 1995)]
[Extensions of Remarks]
[Page E13]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


       INTRODUCTION OF PREPAYMENT OF LIFE INSURANCE BENEFITS BILL

                                 ______


                        HON. BARBARA B. KENNELLY

                             of connecticut

                    in the house of representatives

                       Wednesday, January 4, 1995
  Mrs. KENNELLY. Mr. Speaker, I rise today to introduce legislation 
which has had strong bipartisan support in the past, legislation to 
provide for the prepayment of death benefits on life insurance 
contracts for the terminally ill.
  I first introduced this legislation in the 101st Congress. It had 
over 100 bipartisan cosponsors in the 102d Congress. I subsequently 
worked closely with the Bush administration in its attempt to 
accomplish this important goal by regulation. The regulations, however, 
were not final when the Clinton administration took office and have not 
been finalized. The Clinton administration included this provision in 
the President's Health Care plan and it was subsequently included in 
both the Ways and Means Committee and Mitchell Health Care bills. A 
version of this legislation is also included in the Republican 
contract.
  This legislation would allow individuals who are certified by a 
physician to have a terminal illness or injury which can reasonably be 
expected to result in death within 12 months, to receive the proceeds 
of their life insurance contracts on a tax free basis.
  I believe that access to these assets will make the lives of the 
terminally ill significantly easier with little cost to the Federal 
Government.
  Under current law. life insurance proceeds payable on death are 
generally tax free. This legislation, therefore, should have only a 
minor revenue impact in that the only change would be one of timing--
tax free receipt of life insurance proceeds one year earlier than 
otherwise would be the case.
  In addition, access to these assets is critical to those many 
terminally ill individuals, who have no health insurance. To the extent 
that these individuals tap their life insurance policies to pay their 
final health care costs,. Federal dollars will be saved.


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