Retirement Planning using Life Insurance

What is retirement planning using life insurance?

Retirement planning using life insurance is an option that some people may want to consider.  If you’re concerned about the financial security for your family today and feel uneasy about your future retirement planning goals, it may be time to consider life insurance.

With life insurance you gain death benefit protection. This protection can help pay off your mortgage and replace income should you die. Now, imagine your retirement.

What retirement lifestyle do you imagine? It’s easy to underestimate the cost of your ideal retirement. Permanent life insurance can bridge the gap between what you already have saved and what you will need in the future.

A permanent life insurance policy with the potential to build cash value can be used to supplement your income.

Why life insurance?

Life insurance can help you with two unknowns. The loss of income from a premature death and having sufficient income to enjoy your retirement.

With life insurance you gain death benefit protection not only during your working years, but also during retirement.

In the event of death, the life insurance proceeds are distributed generally income-tax free. Your premium payments into a permanent cash value policy also accumulates interest on a tax-deferred basis.

Through policy withdrawals and loans this cash value can help supplement your retirement planning. The cash value can be used however you see fit.

Who can benefit with retirement planning using life insurance?

First, consider your needs for life insurance today. Think about the items your family will need to pay on their own without your income should you die early.

Next, take a close look at your retirement plan. Will you have sufficient assets to live your desired lifestyle when you retire? Is their a potential need to help supplement your retirement planning income? If not, your not alone..

According to the Life Insurance and Market Research Association (LIMRA) almost two-thirds of pre-retirees say they don’t expect social security and employee pensions to cover basic living expenses in retirement.

Here are a few questions you can consider to see if using life insurance for your retirement planning needs is right for you:

  • Do you have a need for life insurance protection today to help replace your income?
  • Are you planning for retirement and between the ages of 30 and 60?
  • Are you interested in having additional retirement income stability?
  • Have you utilized a qualified plan such as an IRA or 401(k) or do you not have access to a qualified plan?

What are the advantages of retirement planning using life insurance?

  • Immediate financial protection and control. Gain death benefit protection for your loved ones. You own and control the life insurance policy.
  • Tax-deferred growth. Your premium payments can earn interest and grow on a tax-deferred basis.
  • Flexible premium. With universal life or an indexed universal life policy you can adjust your premium payments. This can be an affordable way to control your payments when funds might be limited.
  • Generally tax-free distributions. Any potential cash values within your policy can be taken as generally tax-free loans and withdrawals.

What are the disadvantages of retirement planning using life insurance?

  • Reduced death benefit. Additional premiums may be required to continue the desired death benefit. Policy loans and withdrawals will reduce the death benefit.
  • Premium payments are not tax-deductible. Your premium payments for life insurance are not tax-deductible.
  • Cost of insurance. Permanent life insurance policies require monthly deductions, which include cost of insurance, expense charges, and potentially other charges. These deductions could reduce cash value.
  • Surrender charges. Withdrawals may be subject to surrender charges.

A real life scenario of retirement planning using life insurance

David is a 52 year old owner of a small restaurant. His wife, Diane, takes care of their two kids and helps out some at the restaurant.

David realizes that good economic times come and go, and he may not be able to fully rely on the success of the business for his future needs.

The restaurant does not offer a retirement plan. The costs and administration of setting up a plan is too high.

As David thinks ahead, he’s concerned about retirement and whether he can maintain his lifestyle. He’s counting on the value of his business to fund retirement.

The value of the restaurant is unpredictable and he won’t know that final figure until he tries to sell. Also, there’s no certainty a buyer will be available when he reaches retirement.

Adding to his concerns, David realizes his family would have a difficult time continuing their current lifestyle if he should die prematurely.

David meets with a life insurance agent to voice his concerns. After completing a needs analysis and determining what David can comfortably afford, his agent recommends a permanent cash value life insurance policy.

The death benefit offers protection should David die prematurely. The cash value accumulation potential gives David another source of retirement income outside the restaurant.

With the flexibility, David retains control of his premiums and he likes that the accumulate cash values grow tax-deferred. Also, should he pass away prematurely his death benefits pass income tax-free to his wife.

If you have a need for life insurance protection and want a way to accumulate funds for retirement, then retirement planning with life insurance may be an option to check out. To see what options are available, please contact us at 1-888-393-9003 or




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How can I help?

Mike Raines

I am an independent life insurance agent with over 30 years’ experience. I am an expert in finding coverage for those with past or current medical history such as heart disease, diabetes, post cancer, etc. I also specialize in those that participate in scuba diving, mountain climbing, private pilots, etc. I work with the best life insurance companies in the nation, such as Prudential, AIG, Protective Life, Transamerica to name a few. Each carrier has different opinions on rates and underwriting, and it is my job to match you with the best company. To do that, I need to ask you a few questions about your health and lifestyle to qualify you.

For a FREE quote, call, text or email:

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Cumming, GA 30041


We work with individuals across the nation to secure the best life insurance rates.

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