Life Insurance
Life Insurance
In Retirement
You most likely have a basic understanding of what life insurance is for: it provides for the needs of your loved ones after you pass away. However, it could potentially be used for much more than that. For example, one could use an indexed universal life (IUL) insurance policy to generate tax-free* income. An IUL isn’t the best option for everyone, but it’s worth considering: if you’re interested in using life insurance to supplement your retirement income, please get in touch with us.
How Life Insurance In Retirement Can Help You
Each retiree’s situation is unique. There is no “one-size-fits-all” option for retirement. The best course of action is to consider all possible options before deciding which ones are best for you. An IUL may provide you with certain tax benefits. This is because it’s an insurance product, rather than a traditional retirement account or investment, so it’s subject to different rules. You may be able to gradually transfer funds from your current retirement account, like an IRA or 401(k), into an IUL instead. This could potentially allow you to withdraw the money (and any earned interest) tax-free* at a later date. However, please contact a qualified tax professional when it comes to questions like this.
Life Insurance Benefits
Some of the benefits of choosing life insurance in retirement may include:
- Market losses do not reduce the cash value of your IUL
- The ability to lock in what you accumulate
- Tax-free* growth in cash value
- Access to both principal and interest tax-free*
- You have the option to fund it all at once or over time
- No fines or fees for accessing funds under the age of 59 1/2
"Legacy benefits" that apply to your beneficiaries if you purchased an IUL for retirement include:
- Tax-free* death benefit
- Beneficiaries receive direct payments, no probate court
- Payment to beneficiaries can be received in one lump sum or in installments
- The death benefit can potentially increase over time