Life Insurance Retirement Plan, What is it and should I own one?
A Life insurance retirement plan or cash-value insurance is a permanent life policy that protects you and your family in your "growth or saving years" and then at retirement age you can flip a switch to begin generating a tax-free income in your retirement years.
The main philosophy is that you want the protection when the kids are in the house and perhaps you are protecting a spouse in case the main earner passes away. At retirement age, the assumption is that the kids are out of the house and the mortgage is close to being paid off and now you want to rely on your savings, 401ks, and Life Insurance Retirement Plan to help with the new risk of not running out of money.
Here are some other benefits to these plans.
- Contributions grow tax deferred
- No limit to the contributions. This can be useful for high income or high net worth individuals who may not qualify for a Roth IRA
- Provides downside market protection
- Another vehicle to save for retirement
- Can structure tax-free distributions at retirement.
- Life insurance policy to protect family throughout one's life
Who should own one?
Here are some of the qualifications for this type of program.
- Be insurable, qualify thru health checks
- Looking to save into a plan for retirement for at least 10 years
- Someone who isn't tax diversified - meaning who is either not saving at all or only has a taxable account such as a 401k or an IRA.
LIRP plans, if set up right, can be a powerful tool to protect your family, save for retirement, and also create a tax-free income stream to supplement an existing IRA or 401k. We have you covered when it comes to any life insurance retirement plan at The Ascension Group. Call us at (214)277-9497 for a plan to protect you and your family today!