People don’t typically think of using their life insurance policies for themselves. While these policies are intended to support those that one leaves behind, they also offer several benefits that policyholders can enjoy during their retirement years, such as being able to withdraw money from one’s own life insurance policy. When used wisely as part of retirement planning, a life insurance policy can help cover gaps in savings and grow cash reserves tax-free.
How to Use Life Insurance for Retirement
1. Enhance Income
Life insurance can be used to enhance income in retirement. When a spouse dies, this can create a significant financial burden for the surviving partner. A good life insurance policy offsets this by providing the opportunity to receive additional income when Social Security alone is not enough.
2. Lower Risk
When interest rates are lower, as they are now, investing in bonds and CDs is less appealing. This makes investing in a life insurance policy a good substitute or supplement for a retirement portfolio. Life insurance policies also offer better protection from the high risk of fluctuating interest rates.
3. Boost Savings
A 10- to 15-year term life insurance policy can be used to keep retirement savings on track. Many couples fail to adequately save for retirement. They start too late or don’t put enough away monthly or quarterly. In the event of the death of a spouse, policy money can help cover the gap in saving and allow the surviving partner to live a more comfortable life in retirement.
Need to talk to an insurance agent about a life insurance policy? Reach out to the experienced team at Jeffrey T. Quinn Agency in Meadville, PA. Since 1992, the family-owned and -operated agency has worked closely with the people of Crawford County. They are committed to providing personalized service to help their clients. Browse your coverage options online, and speak with an insurance agent today at (814) 337-2766.