Can Life Insurance Provide Financial Income During Retirement?

guest-postWe do not think of retirement as often as we should. This is dangerous because we risk ending up with little financial possibilities during one of the most fragile period of our lives. Old age comes with its unexpected expenses and we should pay a lot more attention to retirement planning. Life insurance is also something essential for an adult. In many cases, after retirement, the life insurance policy becomes useless and many of us choose to quit it to save some money. But what if we could gains some financial benefits from our coverage plan? Let’s explore the financial possibilities life insurance can provide during retirement!

Usually, when it comes to life insurance, things are pretty simple: you pay premiums in exchange for a benefit which will be paid to your family if you die. With whole life insurance, things get a bit more complicated. The same principle applies, but you also benefit from an investment component. Permanent policies provide coverage for the entire life of the insured and at the same time they build cash value by deducting a part of the sum you pay as premiums. The cash value grows at a fixed or variable rate and after a couple of years (usually between 5 and 10 years) the insured can withdraw a part of the gathered amount.

How can this help with your retirement? Because the policy builds cash value, you will have gathered a sufficient amount at the time you retire. Withdrawing money from the account is tax-free as long as the retired amount does not exceed the policy’s value.

Whole life insurance plans require a bit of planning though. You cannot expect to save a large amount of cash if you get the policy in your 50s. This is a long-term investment, which means that you need to plan ahead. Premiums can be expensive and if the interest rate is not profitable, permanent coverage can actually be a financial strain during retirement!

If you need life insurance for 65+, you should not buy a whole policy coverage; instead go for a temporary policy! Whole life insurance requires time to build cash value!

Variable life annuities are a medium risk investment. You can purchase a variable annuity by making a single payment to an agency. Your money will be directed into different account and after a designated period of time, you will receive regular premiums. The advantage is that you will have a steady income gain throughout your retirement, as annuities are paid until you die.

The risk is that the stock market can go bad and the returned investment will not be the one you expected. However, agencies have a guaranteed rate of return, so you at least will get some money back. Life annuities should be bought when you are in your 40s or when you are at your financial peak. The investment will pay out during your retirement and you will have an extra source of income!

A life insurance plan that pays out during retirement is a wise investment! You will have the benefits of life coverage and at the same time you will also have a guaranteed financial income during retirement!

For more information about life insurance for seniors over 65, visit! Here you will find valuable information and many quotes that will help you find and purchase the best life insurance plan available!

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