The rise of the long-term health care issue on the American agenda is prompting proposals that claim to ease cost burdens for employers and government.

The latest innovations are coming from the life insurance industry, which is developing products that pay death benefits before the policyholder's death, if the policy is used for retirement health care or terminal illnesses.This is known as an accelerated death benefit.

Harold Yancey, Utah insurance commissioner and head of the National Association of Insurance Commissioners' committee overseeing this project, said that competitive forces will force proliferation of such products.

Surveys show that both employers and individuals are willing to invest in long-term health care products if they are affordable, practical and available. Lobbyists have been effective in getting lawmakers to notice their idea.

Sen. Bill Bradley, D-N.J., has introduced such legislation. His bill would

allow individuals who have been certified by a physician to be terminally ill to access all their life policies on a tax-free basis.

Janelle Patterson, a lobbyist for the American Council of Life Insurance, says the bill doesn't go far enough. "We're looking for legislation that would not only cover terminal illnesses, but one that would be expanded to cover other long-term expenses."

But the trade group isn't apt to get it, according to some industry experts. ''Tax policy is revenue-driven," says Frank Friedler, an insurance lobbyist in New Orleans. "It's tough to prove to Congress that the social good will outweigh the loss of income to the government."

Mr. Friedler said, however, that expanding the Bradley legislation is in the best interest of everyone, because the federal government simply can't afford to pay for long-term health benefits alone. "It may be the cheapest alternative around."

The trade group said current health benefits to policyholders are paid tax-free and dispersals of early death benefits should not be treated any differently.

But Bart Larocca, also an insurance practitioner and lobbyist in New Orleans, says Congress may consider an early pay-out of death proceeds as a distribution and therefore consider it fully taxable.

Commissioner Yancey said he is recommends that policyholders who have purchased the right to access their death benefits early consult with tax attorneys about their exposure.

The insurance association also wants premiums to be tax-deductible. Currently, employers who pay health costs for their workers can deduct the premium, but individuals who pay their own premiums, either as part of a group or individual policy, cannot subtract the cost unless it exceeds 6 percent of adjusted gross income.

Mr. Larocca said that since the health insurance system is already set up to pay medical costs, he can't see Congress allowing another deduction for the same purpose.

The life insurance association would also like Congress to give a tax preference to accelerated death benefit products if the premium is paid out of long-term tax-advantaged products like Individual Retirement Accounts.