Life Insurance: A Quiet Engine of Louisiana’s Business Climate

In conversations about Louisiana’s economy, industries like energy, agriculture, and tourism often take center stage. But quietly and consistently, the life insurance industry has been powering economic stability, job creation, and long-term investment across the state.

Today, life insurance plays a dual role in Louisiana: it provides financial security for families while anchoring a major slice of the state’s economic infrastructure.

A Financial Lifeline for Families

Life insurance is not just about payouts—it’s about peace of mind. For millions of middle-class Louisiana families, life insurance offers the security to save, invest, and build a future without fear of financial ruin in the face of loss.

In 2022 alone, life insurers paid out more than $3.1 billion in life insurance and annuity benefits to Louisiana residents—over $8.5 million every single day. That’s real money going into households facing the death of a loved one, retirement transitions, or other life-changing events. With an average death benefit of $85,000, life insurance offers a lifeline when it’s needed most.

Fueling Jobs and Investment in Louisiana

Beyond its value to individuals, the life insurance industry is a powerful economic driver. It supports 27,900 jobs across the state and contributes a staggering $69 billion in long-term investments into Louisiana’s economy. That investment flows into infrastructure, education, housing, and other vital sectors.

There are 3.6 million individual life insurance policies in force across the state—a clear signal that the industry is woven into the fabric of Louisiana life. And with 97 million Americans receiving life insurance through their employers nationwide, the economic ripple effect of this industry is vast.

Policy Threats That Could Undermine the Industry

Despite its economic and social contributions, the life insurance industry is now facing a policy threat that could undermine its role in Louisiana’s prosperity. Proposals in Congress to eliminate the corporate state and local tax (SALT) deduction would disproportionately impact life insurers.

Unlike other industries, life insurers are taxed on gross receipts—not just profits—through premium taxes. These are already among the highest effective state tax rates in the country. Removing the SALT deduction at the federal level would effectively amount to a 4% to 7% federal tax hike on life insurers. That increase wouldn’t stay on corporate balance sheets—it would likely be passed along to consumers through higher premiums and reduced take-home pay for employees with employer-sponsored life insurance coverage.

For Louisiana businesses, this means higher benefits costs, reduced workforce security, and added strain on small and mid-sized employers that offer life insurance as part of their compensation packages.

A Call to Preserve a Core Economic Asset

Life insurance isn’t just a consumer product—it’s a long-term stabilizer for families, a funding source for infrastructure, and a core part of the business ecosystem in Louisiana. From job creation to capital investment to everyday peace of mind, the life insurance industry deserves recognition as a strategic asset in the state’s business climate.

As federal policymakers consider changes to the tax code, they must take into account how these changes will affect not just corporations—but the people and local economies that rely on this industry to thrive.

Protecting the life insurance industry means preserving a quieter, but no less essential, engine of economic security for Louisiana’s future.