Life Insurance In Retirement

You have at least a basic idea of what life insurance does: Its primary purpose is to provide for your loved ones after you are gone. However, life insurance can potentially 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 tax-free* income source. Life insurance in retirement can be used to protect some of your assets while earning a reasonable rate of return** on them.

If you have money in low-earning accounts such as CDs, an IUL may help you see a better rate of return.** Using life insurance in retirement can also provide benefits specific to your beneficiaries. For example, the death benefit is tax-free,* and reaches them while avoiding probate court. If you’re interested in the benefits offered by this product, reach out to us. Life insurance in retirement might be the right choice for you. Attend an educational seminar event to learn about your options, or schedule a one-on-one meeting with us to discuss your situation.

A Great Source of Income

IUL For Retirement

Life insurance may be a great source of retirement income, depending upon your individual situation of course. One reason for this is that insurance policies follow different rules than typical retirement plan accounts do.

For example, they apply to different tax rules: If you currently have a retirement plan account such as a traditional IRA or 401(k), you pay taxes on your withdrawals. And, when you reach a certain age, you must take required minimum distributions and pay those taxes. In contrast, you can take income tax-free* from an IUL policy. Additionally, you may be able to slowly convert some of the money from your current retirement accounts into an insurance policy instead. If you’re looking to lessen the burden of taxes on your retirement income, an IUL may be of use to you.

A grandmother enjoying life insurance in retirement by spending time with her granddaughter in the kitchen.

Benefits of Life Insurance In Retirement

Using life insurance in retirement comes with numerous benefits. Firstly, there are the features of these policies that help you during your retirement:

  • The cash value of your IUL remains protected in the event of a market downturn
  • Cash value growth based on the performance of a market index or indexes
  • Fund your policy all at once, or over time
  • Tax-free* growth
  • No fees or fines for accessing the money before reaching age 59 1/2
  • Tax-free* access your principal & any interest

Then, there are benefits available to your heirs after you are gone:

  • Immediate death benefit (avoids probate)
  • Death benefit can be received as a string of payments, or as one lump-sum
  • The death benefit can be much greater than the premium paid
  • Tax-free* for the beneficiaries