It’s Your Life.

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By Nancy Monaco-Ball

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“Life insurance is a waste of money.” That lady on TV says, “Only buy term. Whole-life is too expensive”, etc…

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We have heard every line out there regarding life insurance and I would agree all the above statements are true for someone. The problem is… are you sure it is for you?

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If you have ever sat down with any of our advisors, chances are you have heard one of us say there is no perfect financial tool. If there was a perfect financial tool, we would all have our money in it and live on a beach in Bora Bora, instead of Arizona in September.  The key to any successful tool in retirement is education, and how those tools fit into a comprehensive retirement plan.

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Permanent life insurance should be considered a foundational element of any solid retirement plan, if your family is depending upon your retirement income, and you have not yet saved enough to live off dividends.  The majority of the time we focus on our clients who are nearing retirement, and we constantly hear “We wish we would have come to see you 10 to 15 years ago”.

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When properly structured, permanent life insurance can provide tax-deferred growth, tax-free cash flow, and a tax-free death benefit.  One of the biggest frustrations our clients have is their tax rate, once they retire. Most people assume their tax rate is lower, however, the majority of our clients see no decrease, and many times their taxes actually increase.  Additionally, there are no RMDs with the cash value accumulated inside permanent life insurance. (IRS required minimum distributions or penalties for taking money out before age 59 ½.)

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How would you like to get $42,000 a year in tax-free income from age 66 to 85? By paying $12,000 for 16 years, from age 45 to 60, you may add tax-free income to your retirement plan. Maybe you, your children, or grandchildren have an old 401k that can be used to generate tax-free income in retirement but no one has ever explained the benefits.

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Permanent Life Insurance as an asset is not suitable for all, but like a wise man once told me, “you don’t know what you don’t know” and I definitely wouldn’t want to miss out on knowing how to get tax-free retirement income.

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This is a hypothetical illustration and is intended to show how assumptions affect the accumulation value and death benefit and it may not be used to project or predict dividend or interest credited results. Assumptions include a hypothetical interest rate, current mortality charges, and current expenses. The actual accumulation value and death benefit will vary based on a number of factors including the amount of dividend
or interest credited.