Executives at Nationwide Financial are scrambling to counteract the impression that its sales would be hurt if the next administration in Washington revives a bill to repeal the estate tax.

Though President Clinton vetoed the bill Congress sent him this year, Peter Golato, vice president of brokerage life sales for the Columbus, Ohio, insurer, and David Kearsley, director of advance sales and a tax attorney, said estate tax repeal would probably be proposed again if George W. Bush wins the presidency.

This possibility has them on the defensive.

Companies such as AFLAC, Conseco, and Nationwide could see a drop in estate planning business if the estate tax were repealed, according to a recent report by Merrill Lynch & Co.

In addition, an analysis by Fox-Pitt, Kelton Inc. of New York said that repealing the estate tax would hurt the sale of life insurance products. Sales of estate planning products have been growing by 20% to 30% annually, but the repeal legislation, if enacted, would slow growth significantly, the study said.

The Nationwide executives contend that the products would remain viable investments, even if a change in the law removed some of their benefits. "It really doesn't matter what happens to estate taxes, in general," said Mr. Golato, who is responsible for the company's sales through banks, brokerages, and financial planners. "You should never stop planning your future."

Mr. Kearsley said avoiding estate taxes is only one advantage of life insurance products.

The basic estate tax advantage of life insurance is for people with multimillion-dollar estates who can set up an "irrevocable life insurance trust," he said.

"The trust holds life insurance and provides liquidity to the estate," meaning that the cash provided for by the policy is available to pay such costs as estate taxes, Mr. Kearsley said. These types of products are, themselves, exempt from estate tax, he said.

Many insurers have created products specifically for these irrevocable trusts, and the "uncertainty caused by the possible elimination of estate taxes is really a pall over that market," he said.

Repeal of the estate tax, however, would not change the other clear benefits for high-net-worth people of using life insurance as part of a retirement and estate planning portfolio, Mr. Kearsley said.

"If they eliminate estate taxes, that doesn't mean they aren't going to bring [them] back" in the future, he said. Because estate taxes affect only people with estates valued at more than $600,000, the possibility that a repealed tax would later be reinstated is high, he said.

"You don't know what's going to happen, and what you need to do is put together a plan that accomplishes more than one goal," Mr. Kearsley said.

Life insurance has value beyond its exemption from estate taxes, he said. Though heirs pay income tax on the disbursement of other investments owned by a person who died, life insurance payouts are free from income tax, too, he said.

These products also offer additional retirement savings for high-net-worth people, Mr. Kearsley said. "There is a limit on how much you can put into your IRA or your 401(k), but there are no limitations on how much you put into your life insurance policy," he said.

Many policies have clauses that let policyholders take cash out at favorable rates, which can help fund retirement for people who have maxed out their contributions to other plans, he said.

Mr. Golato said that companies have created products, such as Nationwide's New Generation Survivorship Life policy, that are flexible enough to be valuable in a variety of tax environments. These products are "a wealth-accumulation product much more than a death benefit," he said.

The Nationwide policy offers "the ability to build wealth on a tax-deferred basis and access to the cash value of the policy under very favorable tax rates," he said. Wealth accumulates in policies like this whether or not there is an estate tax, he said.

Mr. Golato objected to studies that say life insurers will be hard hit by tax changes. It is wrong "to say that our sales will decline as a result of this," he said. "I emphatically disagree with that."

Companies that "simply sell life insurance that's tied to estate planning are going to get hurt with an estate tax elimination," but Nationwide and other major life insurance carriers, which offer more flexible products that meet a variety of needs, would not be affected, he said.

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