Most individuals and families feel they need to save money. While the need to save may be unrelated to the need for life insurance protection, many people have chosen to save by using life insurance. Visit our website at:

For such people, a cash value life insurance policy is not only an instrument of financial protection against premature death but also a financial asset that can be borrowed against or surrendered for cash when needed.

Moreover, at retirement, it can be converted into an income stream that provides a lifetime guaranteed income, depending on the settlement option chosen, or one that is entirely tax free.

Cash value in life insurance policies is routinely used to provide income, so it is not surprising that life insurance can play a role in retirement planning.

An advantage of using life insurance to produce retirement income is that earnings in a policy’s cash value are tax-deferred until withdrawn; however, by using a strategy of withdrawing funds from the cash value only up to an amount equal to the policyowner’s cost basis (total premiums less dividends) and then switching to policy loans, a policyowner’s income from a life insurance policy’s cash value can also be entirely tax free.

The policyowner can withdraw an amount tax free from the policy equal only to his or her total net premiums paid. When that has been done, the policyowner can switch to policy loans to continue to take funds from the cash value tax free.

A cautionary note, however, is that a policy using this strategy must not be surrendered or allowed to lapse. If the policy owned by a policyowner employing this strategy is surrendered or allowed to lapse, the entire outstanding policy loan is considered a distribution and can result in substantial income tax liability for which there may be little or no remaining cash value to offset.

The policyowner must permit the policy to be paid as a death benefit. In such a case, no income tax liability results.

Life Insurance in Qualified Retirement Plans: a qualified retirement plan is a tax-advantaged plan that provides for the payment of retirement benefits to covered employees and is maintained by an employer.

Depending on the provisions of the qualified retirement plan document (simply referred to as the plan document), life insurance can sometimes be purchased through a qualified pension or profit-sharing plan.

In such a case, the life insurance is purchased and owned by the plan, using employer contributions to the plan as a source of premiums.

Benefits of Life Insurance in Qualified Plans: although purchasing a life insurance policy inside a qualified retirement plan may reduce the amount of funds available at retirement per contribution dollar, it offers several benefits.

Are you retiring or inherited money and looking for help with managing your assets for a new debt-free life and smart retirement? Perhaps we can help. Call 1-573-441-7100 to start a dialogue about your new financial and personal life goals in retirement.

Our advisors at Alpha Family Office ensure peace of mind by protecting our clients’ assets with our proven estate planning and smart retirement strategies.

Alpha Family Office helps optimize life with our estate planning and wealth management services.

Since 1994, we have been helping clients protect their assets for smart retirement by creating customized estate and retirement strategies with robust financial portfolios to meet their long-term financial and lifestyle goals.

We address the challenges that many of our clients face in today’s global economic environment of complex tax and regulatory changes during adverse or catastrophic market conditions (the so-called “black swan” unexpected events that can dramatically affect global markets and change lives).

Alpha Family Office is the holistic solution available to people looking for stability and control of their assets through our financial planning, wealth management, administrative, and lifestyle services.

Our family office creates customized estate and retirement strategies with robust financial portfolios to meet our clients’ long-term lifestyle and financial goals.

Our advisors would be glad to discuss our asset management, retirement planning, private banking, insurance, annuities, trusts, wills, and all available Medicare options for your state.

We also develop custom equity portfolios for clients with rather complex international asset management needs.

Call now +15734417100 to learn how we could help optimize your life.

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LEARN MORE ABOUT: Qualified Retirement Plans

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