3 Ways Life Insurance Can Help Maximize Your Retirement | CA Benefit Advisors

If you’re one of the mil­lions of Amer­i­cans who owns a perma­nent life insur­ance pol­i­cy (or are think­ing about get­ting one!) you’ve prob­a­bly done it pri­mar­i­ly to pro­tect your loved ones. But over time, many of your finan­cial oblig­a­tions may have end­ed. That’s when your pol­i­cy can take on a new life—as a pow­er­ful tool to make your retire­ment more secure and enjoyable.

Per­ma­nent life insur­ance can open up options for you in retire­ment in three unique ways:

1. It can help pro­tect you against the risk of out­liv­ing your assets. Struc­tured cor­rect­ly, your pol­i­cy can pro­vide sup­ple­men­tal retire­ment income via pol­i­cy loans and with­drawals. Hav­ing a pol­i­cy to draw from can take the pres­sure off invest­ment accounts if the mar­ket is slug­gish, giv­ing them time to rebound. Some poli­cies may also pro­vide options for long-term care ben­e­fits. At any time, you may also decide to annu­itize the pol­i­cy, con­vert­ing it into a guar­an­teed life­long income stream.

2. It can max­i­mize a pen­sion. While a tra­di­tion­al pen­sion is fad­ing fast in Amer­i­ca, those who can still count on this ben­e­fit are often faced with a choice between tak­ing a high­er sin­gle life dis­tri­b­u­tion, or a low­er amount that cov­ers a sur­viv­ing spouse as well. Life insur­ance can sup­ple­ment a sur­viv­ing spouse’s income, enabling cou­ples to enjoy the high­er, sin­gle-life pension—together.

3. It can make leav­ing a lega­cy easy. Accord­ing to The Wall Street Jour­nal, per­ma­nent life insur­ance is “a fan­tas­ti­cal­ly use­ful and flex­i­ble estate-plan­ning tool,” com­mon­ly used to pass on assets to loved ones. Pol­i­cy pro­ceeds are gen­er­al­ly income-tax free and paid direct­ly to your ben­e­fi­cia­ries in a cash lump sum—avoiding pro­bate and Uncle Sam in one pass. Your pol­i­cy can also be used to pay estate tax­es, ensure the con­ti­nu­ity of a fam­i­ly busi­ness, or per­haps leave a lega­cy for a favorite char­i­ty or institution.

“Hav­ing a pol­i­cy to draw from can take the pres­sure off invest­ment accounts if the mar­ket is slug­gish, giv­ing them time to rebound.”

If you do expect your estate to be taxed, you can even estab­lish a life insur­ance trust, which allows wealth to pass to your heirs out­side of your estate, gen­er­al­ly free of both estate and income taxes.

Where to start? A pol­i­cy review
If you’ve had a life insur­ance pol­i­cy for awhile, sched­ule a pol­i­cy review with your life insur­ance agent or finan­cial advi­sor. By the time you reach mid-life, you may have a mix of cov­er­age—term, per­ma­nent, group or even an exec­u­tive com­pen­sa­tion package.

Your licensed insur­ance agent or finan­cial advi­sor can help you assess your sit­u­a­tion and adjust a cur­rent pol­i­cy or struc­ture a new pol­i­cy to help you achieve your retire­ment plan­ning goals.

If you have no cov­er­age at all, there’s no bet­ter time than today to get start­ed. Life insur­ance is a long-term finan­cial tool. It can take decades to build per­ma­nent pol­i­cy val­ues to a place where you can use them toward your retire­ment goals. And, health pro­files can change at any time. If you’re healthy, you can lock in that insur­a­bil­i­ty now and look for­ward to years of tax-deferred (yes!) pol­i­cy growth.

Retired already? The best thing you can do is meet annu­al­ly with your per­son­al advi­sors to ensure your plans stay on track. Mar­ket con­di­tions and fam­i­ly cir­cum­stances change, so that even the best-laid plans require course adjust­ments over time.

By  Eri­ca Oh Nataren

Orig­i­nal­ly post­ed by www.LifeHappens.org

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