Life Insurance Specialists are helping to show us that investing in Life Insurance is a wise way of funding our retirements.  Today, low-interest rates and an ever-changing stock market make Life Insurance worth looking at.  Have you heard of SIRP? This stands for what we are talking about here: Supplemental Income for Retirement Plan.

How is permanent life insurance helpful? This type of policy is protected from current taxation so as it grows, it grows tax-deferred. It may take 10 or 15 years to accrue enough cash value to generate what someone may feel as if there is income, it is easy to access.  There is no “approval process” and can normally be received within days.

Likewise, if you are not eligible for a Roth IRA, Life insurance can be used as a good savings alternative. 1) they have an income that is too large to satisfy the Roth requirements, 2) they have no income, or 3) they want to save more than allowed by contribution limits.  This is because life insurance has no contribution limits, cash values grow tax-deferred, distributions are tax-free and there are no minimum required distributions. This makes a permanent life insurance policy a good alternative to a Roth IRA.

We hear of many people taking advantage of the common options for setting aside tax-advantaged funds such as 401(k)s and IRAs (i.e. qualified plans). However, we are here to tell you utilizing permanent life insurance for supplemental retirement income is yet another one of these options.

Here are just a few reasons why life insurance is a good option for retirement income:

1. Cash accumulation – It can be used as your personal needs see fit.
2. Tax-deferred growth – No tax is due on the appreciation of cash values.
3. Tax-free access to cash accumulation – You can make withdrawals up to basis and loans.
4. No mandatory distribution – There are no required minimum distributions (RMDs) at age 70 1/2 as with qualified plans.
5. No taxation of Social Security – Unlike RMDs, it does not create taxation of Social Security.
6. Access to cash at any age – Should a cash need arise before retirement, you’ll be prepared.
7. No minimum age or income requirement – Anyone can purchase life insurance; however, it does have health and financial requirements.
8. Continued policy funding if disabled – Check with your life insurance agent for the best options
9. Death benefit – Life insurance provides tax-free income for your beneficiaries/heirs.
10. Avoids probate – Your death benefit is paid directly to your beneficiaries/heirs.

Life insurance provides unique options to add in your savings and retirement income. A well-funded SIRP – supplemental income for retirement plan – can provide you the income you need for a secure retirement.