Life Insurance For Retirees: Preserving Your Legacy – Many people forget about the things they want to experience in retirement because they focus on being able to give something to people or causes that are important to them. Or they may worry about the need to use their retirement savings to cover a planned expense A possible solution to these concerns may come from a tool you are already familiar with – life insurance
Permanent life insurance can help protect the legacy you’ve created for your loved ones or support a charitable cause that’s important to you. Also, buying a policy with a lump sum payment can give you the opportunity to get cash value to pay for unexpected things while you’re alive or to pay for unplanned medical expenses for your loved ones.
Life Insurance For Retirees: Preserving Your Legacy
Whether you’re trying to protect your inheritance or feel prepared to handle unexpected expenses, life insurance can help you do those things while allowing you to live the life you want today and enjoy your retirement years.
Legacy Asset: What It Is, How It Works, Examples
Most people know that you can use life insurance to replace lost income and cover funeral or other final expenses related to your passing. What if you want to leave a legacy in other ways?
The death benefit of your life insurance policy can pay more than the income or expenses associated with your passing. Generally the death is assured, as long as there is sufficient cash value in the policy This can provide a solid foundation for your inheritance, allowing you to enjoy your retirement years without worrying about what’s left for your beneficiaries.
Talk to your advisor about your goals for transferring assets to family or other beneficiaries and see how life insurance can play a role. Here are some ideas that may inspire you:
Nearly half of respondents cited rising health care costs, major cuts to social programs, shrinking markets and rising inflation, as well as the possibility of unforeseen expenses, which hurt economic sense.
Boost Your Retirement Fund And Legacy With Life Insurance
Source: 2019 Lifetime Income Survey on Employment and Compliance Objectives, https:///public/pdf/957604_2019_lifetime_income_survey_executive_summary_final.pdf opens in a new window pdf
What if something unexpected happens or if you are asked to help care for an elderly relative?
Your advisor can help you review the many options that can help you cover the unexpected, and life insurance can be part of that conversation.
Like term insurance, a permanent life insurance policy has the ability to accumulate cash value over time that can be tax-deferred and potentially tax-free. You can pay off the cash value of your policy in whole or in part or take out a low-interest loan against your policy. If you repay with interest, the death benefit associated with your policy may also not be reduced
Who Needs Life Insurance?
Generally, if you pay annuities to fund your life insurance policy, the cash value takes time to build up, so you may not be able to access it right away. If you pay a lump sum on the policy, however, you can get the cash value faster
Think about the “don’t touch” money you keep Could you put this money to good use in a life insurance policy that allows you to access it while also providing a death benefit? Or, if you’re getting ready to start taking required minimum distributions (RMDs) in your retirement account but have plenty of savings, should you invest those RMDs in a policy that will help meet other goals?
Permanent life insurance can give you the ability to make financial adjustments if your circumstances change Your advisor can help you understand all of your options and how life insurance can fit into your overall financial plan to help you achieve your goals.
*If the policy is classified as a modified contract (MEC) under IRS regulations, distributions are generally subject to income tax and a federal tax penalty if made before age 59/2. Consult your tax advisor for details
Lessons For Creating A Family Legacy
The Group of Companies does not provide tax or legal advice Tax and other laws may change in the future or from time to time Individuals should consult an independent tax advisor, CPA and/or attorney for specific advice based on the individual’s unique circumstances. Examples in this article, if any, are hypothetical and for illustrative purposes only
Life insurance policies contain exclusions, limitations, reductions in benefits and conditions for protection A life insurance agent can give you the price and complete details
This material is for informational or educational purposes only and shall not constitute fiduciary investment advice under ERISA, securities advice under any state securities laws or insurance product advice under any state insurance laws or regulations. This material does not take into account specific investment objectives or circumstances or recommend a particular course of action Investment decisions should be based on the investor’s objectives and circumstances
Advisory and Planning Services, a division of CREF Individual and Institutional Services, LLC, are advisory services provided by a registered investment advisor. When it comes to sharing your retirement funds and your inheritance, it can seem like a trade-off between a comfortable retirement, or a difficult inheritance. Of course not You can have the proverbial cake and eat it too with retirement income products and life insurance
How To Buy An Annuity
This financial solution is designed to meet your retirement and legacy needs at the same time Life insurance provides guaranteed lump sum payments that can be used to build more wealth during your retirement and increase the wealth you want to distribute.
Like exercising to maintain and improve your strength and flexibility, life insurance can also enhance your retirement and inheritance planning.
While each family faces different circumstances, a common theme often repeats itself: When wealth is passed down from generation to generation, the next generation often has less wealth. While it may be tempting to settle this quickly by deciding to retire early, there are ways to deal with these competing needs. One important strategy is to take advantage of different types of life insurance
For example, James has $10 million in assets and plans to use half of it for retirement, leaving the other half to his heirs. If her descendants do the same, Beatrice’s grandfather will be left with $1.25 million after two generations of wealth.
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Million for life insurance policy. With $1 million in premium payments, James will have more for his retirement, leaving a larger legacy. By following this strategy, each generation protects the family’s wealth from decline
In this strategy, your retirement needs are separated into monthly retirement income policy payments, and your inheritance is protected through a universal life policy.
For example James, who has $10 million in cash and investments. Before adopting this strategy, he would have had $5 million to retire on, leaving $5 million to his son Alex.
By combining estate planning and income tools, James is able to increase his retirement savings by $7.5 million and transfer $12.1 million in assets to Alex.
Why Life Insurance Is Vital For Entrepreneurs
Another common issue stems from the illegitimate nature of wealth, which high net worth individuals face, despite their wealth. For example, assets such as real estate, antiques, and heirloom jewelry cannot be divided easily
Rather than being forced to sell these illegitimate assets, to distribute them fairly, a life insurance settlement can enable you to distribute assets to one beneficiary and assets of equal value to another.
For example, Peter’s net worth is $23 million – $10 million in business, $7 million in real estate, $3 million in investments, and $3 million in cash.
The eldest of his three children is actively involved in the family business and James plans to pass the business on to his eldest child. The second will inherit the landed property and the younger son will get the investment portfolio and cash
Help Reduce Risk In Your Retirement Plan With These 4 Ways
Each child will inherit a different net worth This is where life insurance can be used to make a difference in inheritance to balance the distribution
Term insurance insures for a specified period of time, such as 10 years, 22 years or until they reach a certain age. Pays the sum assured to the beneficiary if the insured dies during the policy term
Since insurance is a pure protection product without any reservation, it is the cheapest instrument to pay for insurance. Examples of insurance plans include TermProtect and ManuProtect Term (II).
Whole life insurance provides protection to the policyholder throughout his life With life insurance, a portion of the premium is invested in a mutual fund managed by the insurance company.
Life Insurance Solutions From Experts
On death, the policy pays the sum assured and the accumulated benefit An example of a whole life insurance plan is Life Ready Plus (II).
Universal life insurance can help you reach your financial goals by allowing you to build cash value through interest accumulation or by allowing you to access that cash value when needed. You have flexibility
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