Your Lincoln financial advisor, like most in the industry, has considered life insurance coverage and retirement planning to be two separate accounts. Retirement planning was a way to take care of yourself when you were ready to kick off your working shoes and enjoy everything that Nebraska has to offer. But what happens if you don’t make it to retirement? What happens to your loved ones in the event of your death? With changing trends in the financial markets, having a life insurance policy takes care of your beneficiaries when you no longer can while benefitting your retirement. Your financial standing and lifestyle will determine whether you choose a Term or Permanent policy.
- How Incorporating a Term Life Insurance Policy is Best for your Retirement Plan
Purchasing the right death benefit for your family at the lowest cost is an overlooked step in saving money towards retirement. Most households have a spouse and children who depend on your income to maintain the standard of living that you set in motion. Term life insurance provides the primary financial protection that your family needs if you pass away before reaching retirement. The lower, fixed premium that term life policies offer free up income making it disposable and easier to save or invest.
- How a Permanent Life Insurance Policy Benefits Retirement
Permanent life insurance policies are a great option to supplement retirement funds if your net worth is in the millions. The four types of Permanent Life Insurance Plans include:
- Whole life insurance policies, which remain in effect your entire life as long as premiums are paid.
- Universal life insurance policies give you flexibility with premiums and benefits where you get to decide the amount paid.
- Variable life insurance policies are also flexible but they allow you to decide where your premiums are invested.
- Hybrid policies combine your life insurance policy with long-term care benefits.
In addition to death benefits, a portion of your premium is transferred into a separate account where it can accrue cash value. Permanent life insurance gives the ability to borrow money from your death benefit to place towards retirement. This will essentially lower the value of your death benefits until they are paid back. With this comes a tax advantage as well. Borrowing cash from your life insurance policy to use toward retirement is considered Tax Free.
The main reason for purchasing a life insurance policy should be to protect your legacy and loved ones in the event of your passing. Purchasing a life insurance policy and maximizing all of its assets correctly is a smart way to make sure that your financial future is secure. Understanding your financial standing and lifestyle needs is easy with our insurance calculator. After that you are ready for your free quote and on your way to securing your retirement.