President, Lane Independent Agency, Southern California
Smart question. You are thinking ahead, seeing that Life Insurance is there as a retirement tool also, not just a death benefit, when you choose Whole Life Insurance. An experienced agent should go over with you the detailed needs you now have and can expect. Such things as the mortgage, a spouse, kids, your income and standard of living. Think of it as a pyramid with a ball rolling down it. The only thing that keeps the ball up now is your income. Later you will need life insurance for your family to keep that ball from down and their standard of living from rolling down with it. During retirement, however, you need to think about being able to take money from your growing whole life policy, to help fund your retirement. The more your expenses will be, the more whole life you will need to get now. Think of retirement as a week of Saturdays. Saturday is the most expensive day of the week for most. Retirement will probably be like all Saturdays for many. If your whole life policy started as $1 million, it could easily grow over time to a death benefit of $4 million. If you borrow against it for retirement, something that is regularly done by a few insurance plans, you may reduce that benefit over time, but the policy still continues to grow as though the money had remained in. The death benefit still could be more than sufficient, and your retirement could be very pleasantly funded too. You need an experienced agent to work with to make this happen. Gary Lane, Registered Representative and Agent with New York Life, 949 797 2424. Thank you.
When you retire, the amount of life insurance you need will depend on what you want to accomplish. Since lnsurance, if funded properly, can provide a tax-free income this can be a great supplement to meeting your retirement income needs. Life Insurance, if designed correctly, can provide access to the death benefit if you suffer a critical illness such as a heart attack or stroke. Long-term care needs may also be covered as well.
It is critical that you sit down with your agent/broker so all these strategies can be
addressed using life insurance.
Besides the amount of life insurance you might want to purchase to supplement your retirement income; or to help pay bills if you become critically, chronically or terminally ill; you should consider the amount of final expenses you will have upon death. Perhaps you want to leave your home mortgage free for your spouse. You may want to pay travel expenses for your children living out of the country, so that they can afford to attend your funeral. Some people buy life insurance to pay estate taxes, or to leave an inheritance for grandchildren. There are many needs that life insurance can meet in a tax friendly way, even during retirement.
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It is critical that you sit down with your agent/broker so all these strategies can be
addressed using life insurance.