4 Ways Your Life Insurance Policy Can Benefit You While Living

You’ve shopped around for a permanent life insurance and have found a policy that yields the best benefits for your family from funeral preparations to aiding in supporting them for years after your demise. However, you may not be aware that there are some ways you can reap the benefits of your life insurance policy during your life as well.

You don’t have to simply consider end-of-life benefits regarding your life insurance policy. Here are four ways you can utilize the quality advantages of your life insurance policy during your lifetime to benefit your family and help you prepare for the next stage in your life.

1. Minimize Taxes in Your Retirement

A whole life or universal life insurance plan can be used as a tax-free form of cash flow during retirement. Policy owners can utilize their life insurance similar to a personal pension and take distributions tax free while in retirement. With index universal life, your policies can even gain considerable interest or rates of return with the premiums contributed. In these ways, your life insurance policy operates like a retirement savings account in which you can use it to generate cash flow during retirement.

2. Use to Fund Your Child’s College Tuition

529 plans are good. But life insurance policies are just as good, if not better to plan for college education expenses. If well planned, you could benefit your future generations sooner than you think with max funding a index universal life (IUL) policy for you or (better yet) your kids. With IULs, potential gains could be capped vs. 529s, but you do not lose money in your insurance policies when the market is negative (as you would in 529 plans).

Potentially, your life insurance policy could yield better rates when taking out a loan for your child’s (or your own) education than an actual student loan. And when it comes to paying back the interest, the money goes right back into your policy. Additionally, your life insurance can also cover your student loans should any debt exist when it goes into your estate. Should your estate contain any student loan debt, your life insurance coverage can cover the tax placed upon your debt.

3. Explore Living Benefits

When unexpected health complications occur, your life insurance policy can function as additional cash flow support through living benefits. Living benefits can be used as a portion of the death benefit to be used in certain situations. This way, the death benefit is not entirely used during your life but policyholders can still rely on the added financial support of life insurance benefits during your life.

Living benefits can provide financial assistance in the form of chronic illness benefits in which you can receive aid to support the six activities of daily living (ADLs). Terminal illness benefits are also available through your life insurance policy for those who have been certified by a physician. Those needing financial support for medical care during their life expectancy that is shorter than 12 months can use their life insurance policy for living benefits.

4. Sell It Should You Outlive Your Policy

Believe it or not, outliving your life insurance policy is a possibility. If this should be the case for you, when your policy matures (and if you have never made a claim), your insurance company could return the premiums you have made towards your policy (if you have whole life insurance or return of premium rider). Always check on the specifics of your individual policy. Once received, you have the ability to use the money as you see fit.

Policyholders have the option of continuing coverage, receiving the funds in a tax-free savings account or taking out loans against it. Depending on your financial needs when your policy matures, the opportunity to receive a payout from your life insurance policy is another way to benefit from your policy during your life.

How Old Middies Can Help

As you embark on the exciting journey of retirement planning, envision a future where your legacy is not only protected but strategically enhanced. This is where we come into play; seamlessly incorporating life insurance into your retirement strategy. Beyond the typical scope of coverage, life insurance can be a dynamic tool, offering a unique blend of protection and growth potential – all carefully curated to maximize the benefits for you and your loved ones.

Understand that life insurance is not just a safety net; it's an integral component of a comprehensive retirement plan. Picture a retirement where your financial legacy is strategically leveraged to create lasting impact, whether it's providing for your family, funding a child's education, or leaving a charitable legacy. With our personalized approach, we analyze your unique financial situation to tailor life insurance solutions that align seamlessly with your retirement goals and aspirations.

Why leave the legacy you've built over a lifetime to chance? We are committed to optimizing life insurance as a powerful tool in your retirement arsenal and providing you a wealth of knowledge, strategic planning, and a roadmap to a financially secure and impactful retirement. Let us help you navigate the intricacies of life insurance and retirement planning, so you can enjoy the peace of mind that comes from knowing your legacy is in expert hands.

Contact us today at 619-836-2218 or michael@oldmiddies.com