Insurance

Some insurance products and practices have been described as rent seeking by critics. That is, some insurance products or practices are useful primarily because of legal benefits, such as cutting taxes, as opposed to protection against the risk of side effects. USA under the tax legislation, for example, most owners of variable annuities and variable life insurance can invest their premium payments in the stock market and defer or eliminate taxes on their investments until withdrawals are made. Sometimes, this tax deferral is the only reason why people use these products. Another example is the legal infrastructure that allows life insurance to be held in an irrevocable trust which is used to pay a tax while the products themselves are immune from the estate tax.