Life Insurance

Does your family depend on you for income? You should probably consider life insurance for retirement.

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Life Insurance For Retirement

The main function of life insurance, as you’re probably aware, is to leave money behind for your beneficiaries after you pass away.

But, what if we told you that the right type of life insurance could be used as a source of income for you while you’re still alive? Not only that, but life insurance for retirement may offer some benefits that your employer-issued retirement accounts don’t. Specifically, indexed universal life (IUL) insurance could be used for this purpose.

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IUL Insurance

The issuing insurance company gives you a life insurance policy in exchange for the premium you pay. An IUL is typically “max-funded.” This means that the total premium is paid upfront. Then, the insurance company agrees to keep your money protected. Your policy is linked to an index, allowing it to gain indexed interest at a reasonable rate.** But, it’s important to note that your money isn’t invested in the stock market. In fact, no matter what happens in the stock market, even if another crisis happens, the money in your IUL will remain protected.* This may provide you with more confidence and certainty throughout retirement.

If you borrow against your cash value (the money in your IUL) it can be used as a source of tax-free* income.

So, if you have money saved in retirement accounts and don’t want to dip into those yet, purchasing an IUL and withdrawing money from there instead may be a good option for you.

Life Insurance For Retirement: The Benefits

Life insurance for retirement comes with a number of benefits. First, let’s go over features of these products that will mainly help you during your retirement:

  • Cash value growth is based on the performance of an index
  • The cash value of your policy will stay protected even in the event of a stock market drop
  • You have the option to "lock in" what you accumulate
  • Fund your policy all at once, or over time (an IUL is typically max-funded)
  • No fines or fees for accessing your cash value before age 59 1/2
  • Tax-free* growth
  • Tax-free* access to your principal & interest
smiling senior couple going over life insurance for retirement paperwork at the table with their laptop

Benefits offered to your beneficiaries after you are gone, on the other hand, include:

  • Immediate death benefit, avoiding probate court
  • Tax-free* death benefit
  • The benefit can be received as a string of payments, or as one lump-sum
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*Proceeds from an insurance policy are generally income-tax-free, and if properly structured, may also be free from estate tax. Income-tax-free distributions are achieved by withdrawing to the cost basis (premiums paid), then using policy loans. Loans and withdrawals may generate an income tax liability, reduce available cash value, and reduce the death benefit, or cause the policy to lapse. This assumes the policy qualifies as life insurance and is not a modified endowment contract. The Host and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. This content is not intended to serve as the basis for any investment or purchasing decisions, nor does it recommend or involve the purchase, holding, or sale of a security.  All figures herein are hypothetical and for illustrative purposes only to explain general concepts.  No figure is to be relied upon as being accurate nor a guarantee or projection and is meant only as a partial overview of some relevant features and benefits of general insurance products that may be in the marketplace, and whose availability will be dependent on the State of residence of the consumer, and their individual suitability for the product they are wanting to purchase. Where insurance products are mentioned, any and all guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.

IMPORTANT CONSUMER INFORMATION

This site is for informational purposes only and is not intended to be a solicitation for or offering of any product or investment. The offer for sale of an insurance product may only be conducted in a state where the agent is licensed and the product is approved for sale. The providing of investment advice relating to securities may only be done by a properly licensed individual operating through a licensed affiliate entity, unless otherwise exempt. Comments about past performance are not to be construed as a guarantee or assurance of future performance. This website may contain concepts that have legal, accounting and tax implications. We do not provide specific legal or tax advice, nor promote, market or recommend any tax plan or arrangement. Consult a tax/legal professional for guidance with your individual situation. No representations are made as to the accuracy or completeness of the information contained herein or any information contained in any link provided herein, nor does a consumer visiting the web site create an agent-client relationship.

Roy L Ray III, an Investment Advisory Representative (IAR), offers advisory services through Gibbs Wealth Management, an SEC registered investment advisor. The firm only transacts business in states where it is properly registered or is excluded or exempted from registration requirements. Strategic Retirement Solutions, Inc.  and  Gibbs Wealth Management are independent of each other. Insurance products and services are not offered through GWM but are offered and sold independently by Strategic Retirement Solutions, Inc License #15697175 and Roy L Ray III License #7864099.

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