Life Insurance

Life Insurance In Retirement

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Life Insurance

You undoubtedly have at least a rudimentary understanding of what life insurance does. Its main function is to provide for your loved ones after you’re gone. However, life insurance in retirement can provide far more than just a death benefit. For example, an indexed universal life (IUL) insurance policy can be utilized to generate tax-free* income for yourself while you are still alive. Some retirees can use IULs to protect some of their assets while earning a reasonable rate of return** on them.

If you have money in low-interest accounts like CDs, an IUL could help you earn a higher rate of return.** Using life insurance in retirement can also give special benefits to your heirs, such as tax-free* income without going through probate. If you are interested in the benefits offered by this product, please contact us. Life insurance in retirement could be the option for you.

IUL For Retirement

Depending on your specific circumstances, life insurance might be an excellent source of retirement income. One reason for this is that different rules apply to insurance policies compared to traditional retirement savings accounts. For example, consider how tax restrictions affect them. If you currently have a retirement plan account, such as an IRA or 401(k), you must pay taxes on withdrawals. And, after you reach a particular age, you must withdraw a required amount and pay the taxes on it. These are known as Required Minimum Distributions, or RMDs. In contrast, you can withdraw income tax-free* from an IUL policy. Furthermore, you may be able to gradually transfer some of the funds from your retirement plan account into an insurance policy instead. If you're looking to lessen the burden of taxes on your retirement savings, an IUL may be useful to you.

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Benefits of Life Insurance In Retirement

Using life insurance in retirement has various advantages.

To start, consider the features of these products that will benefit you during your retirement:

  • Fund your policy all at once, or over time
  • The cash value of your IUL is protected in the event of a market downturn
  • Cash value growth based on the performance of a market index
  • Option to “lock in” what you accumulate
  • Tax-free* growth
  • Tax-free* access your principal & any interest
  • No fees or fines for accessing the money before reaching age 59½

Features provided to your beneficiaries, meanwhile, include:

  • Immediate death benefit, avoiding probate
  • The death benefit can be much higher than the premium paid
  • Tax-free* for the beneficiaries
  • The benefit can be received as a string of payments, or as one lump-sum
  • And, it can increase over time
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