Life insurance is a fantastic investment, but how many people really know what they’re buying? Sure, you’ll end up with money paid out to your beneficiaries upon your death — but that’s just the tip of the iceberg. There is so much more you can do with it than just giving your heirs some extra cash. It’s worth exploring ways we can utilize our policy as a source of income in retirement to help maintain our lifestyle.
1. Building Cash Value
For many, a permanent life insurance policy is an appropriate choice for retirement. One of the benefits of a permanent life insurance policy, beyond peace of mind protection, is the ability to accrue cash value.
2. Using life insurance for retirement income
You’ve probably heard of life insurance and that it’s a good idea to have one. But you may not know it can be used as a retirement plan when you retire. That’s because Life Insurance policies typically build cash value over time. This cash can then be withdrawn as income through various options, including a lump sum or monthly payments. Further, because this cash value is accumulated tax-free, you can use an existing policy as true income in retirement.
3. Paying your policy with your policy
Did you know that if you own a permanent life insurance policy (single premium, non-contributory), you can also pay your upcoming policy premiums with your cash value? Many of us only think about cashing in our policies when we need that extra money.
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