Weighing in the advantages of cash-value life insurance for retirement

Life insurance is usually associated with the young. Younger adults, particularly those with children under their care, are typically encouraged to take a life insurance policy to ensure that their dependents have some sort of financial backing in the event of their untimely demise. Beyond this, these policies can also serve as an invaluable tool in the retiree’s financial arsenal, particularly for those who have maxed out their contributions to 401(k) and other retirement accounts.

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                                                             Image source: nerdwallet.com

Life insurance policies can provide a retired married couple with some assurance that their spouse would have an additional, tax advantaged source of funds should one of them outlive the other. The death benefit payout received by the bereaved widow or widower would then be used to fund other sources of retirement funds.

The many varieties of cash-value life insurance can also provide retirees with another tax-advantaged place to store their excess retirement funds, delivering an interest payout as the funds accumulate. These funds can be accessed while the individual policyholder is still alive, in the form of a loan or withdrawal, which are tax-free. When used at the appropriate circumstances, this method can deliver some retirees with yet another source of retirement revenue.

However, there are a few disadvantages to this strategy as well. Insurance costs can affect the performance of the policy as an investment asset. Likewise, policyholders should choose when they take out a loan or withdrawal from the policy carefully; the amount is deducted from the final death benefit unless it is paid back.

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Andrew Corbman and the ASC Financial team help older adults explore their options and maximize their revenue streams for retirement. Visit his company’s website for more information.

Examining The Options For Life Insurance In Legacy Planning

Image source: pixabay.com
Image source: pixabay.com

When one mentions legacy planning, the image that comes to mind often involves the elaborate trusts and estate plans associated with the wealthy. In actuality, a legacy plan can be as simple as leaving a will. Due to its finality, it is rarely brought up by all but the most concerned adults (less so by young adults who have even younger heirs), but it remains an important aspect of financial planning. Tackling this issue as soon as possible would smooth out potential problems in the process and ensure a fitting financial legacy for heirs.

At its broadest sense, a legacy plan is a means of bequeathing of the asset of one’s estate upon death, according to the wishes laid out by the deceased person when he or she was still alive. Legacy plans often encompass strategies to maximize the value of the assets received by heirs. They can also include an elaborate setup of funds meant to maximize financial returns while minimizing tax liabilities.

Image source: blackenterprise.com
Image source: blackenterprise.com

Life insurance is among the assets included in many estate plans. Although far from comprehensive, life insurance does provide a fundamental base with which to start planning for the financial future of one’s heirs, especially in the event of an untimely death. Indeed, without the degree of financial security provided by a life insurance policy, a person wouldn’t have much of a financial legacy to speak of.

Selecting the right insurance policies to include in one’s trust assets plays a key role in preserving and building wealth for the trust throughout a lifetime.

Andrew Corbman heads ASC Financial, which helps clients broaden their life insurance options to meet their legacy planning goals. Visit this website for more on his company’s retirement and legacy planning services.