Benefits of
Life Insurance
Life Insurance in Retirement
You probably have a basic understand of what life insurance does.
The primary function of life insurance is to provide for your loved ones after you are gone. However, life insurance in retirement can provide much more than just a death benefit. An indexed universal life (IUL) insurance policy, for example, can actually be used by you while you’re still alive, as a source of tax-free* income. And, some retirees use an IUL to protect some of their assets while also earning a reasonable rate of return** on them.
If you have money in a low-earning account such as a CD, an IUL may help you achieve a better rate of return.** Using life insurance in retirement may also provide some benefits specific to your heirs, such as tax-free* death benefit, which also avoids probate court. If you’re interested in the benefits offered by this product, reach out to us. Life insurance in retirement may very well be the right choice for you.
IUL For Retirement
Depending upon your situation, life insurance in retirement may be a useful source of income for you. One reason for this is that insurance policies follow different rules compared to typical retirement accounts. For example, how tax rules affect them: if you currently have a retirement plan account such as a traditional IRA or 401(k), you have to pay taxes on your withdrawals.
Additionally, when you reach a certain age, you are required to withdraw a minimum amount and pay those taxes. These are called Required Minimum Distributions, or RMD. In contrast, you can take income tax-free* from an IUL policy. Additionally, you may be able to slowly roll over some of the money from your retirement plan accounts into an insurance policy instead. If you’re looking to lessen the burden of taxes on your money, life insurance in retirement may be very helpful for you.
Benefits of Life Insurance In Retirement
Using life insurance in retirement has numerous benefits.
Firstly, let’s discuss the features of these policies that will help you during your retirement:
- The cash value of your IUL is protected, even in the event of a stock market downturn
- Cash value growth is based on the performance of a market index
- The option to “lock in” what you accumulate
- Fund your policy all at once, or over time
- Tax-free* growth and tax-free* access your principal & interest
- No fees or fines for accessing your cash value before reaching age 59½
Features offered to your beneficiaries, meanwhile, include the following:
- Immediate death benefit (avoiding probate court)
- The death benefit is tax free*
- Additionally, the death benefit can be much greater than the premium paid
- It can be received as a string of payments, or as one lump-sum
- Additionally, it can increase over time