Having a life insurance policy is important to protect your loved one’s financial security. Without life insurance, when you pass, your family will be left with your bills and unsettled debt.
Losing a loved one is difficult and made even more challenging when a paycheck needs to be replaced on top of the grieving process. With permanent life insurance, it eliminates the need for recovery of lost paychecks.
Let’s discuss the top three reasons it’s important to think about acquiring a policy even during retirement.
Saving for retirement can be done in different ways including contributing to an IRA or purchasing permanent life insurance. In both of these policies, you can contribute towards a savings account.
Permanent life insurance is like an IRA in the sense that you build your cash-value and it grows tax-free.
Benefits of Getting a Life Insurance Policy
There are many reasons why someone may need to get a life insurance policy during retirement. We’re going to look at the top three today.
1. Avoiding Cost
Getting a policy during retirement can help reduce fees or extra costs. Instead of paying someone to manage your investment and reporting, that money goes directly back to you.
Part of the premium goes towards your death benefit and the other part goes towards cash-value savings. If you’re trying to save money, this is a great way to contribute to savings while building up your death benefit.
2. No Early Withdrawal Penalty or Fee
When it comes to permanent life insurance, there is risk involved. It works like an IRA where the higher the return, the higher the risk. You may have to pay a higher premium if the market takes a dip.
Another benefit is avoiding all penalties and fees for early withdrawal of your funds. If you need to, you can withdraw up to the amounts you paid in premiums without penalty. If you draw out more, you’re subject to income tax.
If you do withdraw money from your account, you’re decreasing your death benefit amount.
3. No Limit on Contributions
One more benefit that is great for taking out life insurance during retirement is the fact there are no contribution limits. There are no limits on how much you can contribute, and no vesting guidelines you have to follow.
Does it Make Sense?
Does taking out a life insurance plan during your retirement make sense? If you want to contribute more money to your policy, waiting until retirement is a good way to do that, you can build cash-value and your death benefit.
A successful and fruitful retirement happens when you have enough money to pay your bills and can still have a good time. A life insurance plan is a way to ensure your assets will continue to grow.
You’re able to take out your money when and if you need, in cases of emergency, without having to pay taxes or hefty fees on your funds.
All in all, if you’re thinking about taking out a life insurance plan to secure your finances for the future and your family, it’s a creative way to do that. It allows you to continue to provide for your loved ones long after you are gone.
There are many places you can get life insurance. Doing adequate research on all the different companies that offer plans will help you on your journey.
If you need more information or are looking for someone to help, check out our blog post on finding the best life insurance plans today!
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