Life Insurance For Retirement

How to Use

Retirement Life Insurance

In addition to leaving money for your beneficiaries after your death, life insurance also offers other advantages. Consider the possibility that your retirement life insurance policy may also provide you with income in retirement. Furthermore, life insurance can provide financial security while earning a reasonable rate of return**. 

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Retirement Strategy and Indexed Universal Life

Depending on your situation, you might want to consider an indexed universal life (IUL) policy. As an insurance product, IULs can generate tax-free* income. In this case, your contribution is subject to a different tax treatment than your stock market investments.

For instance, you pay taxes if you withdraw money from a traditional IRA or 401(k). A certain amount of money must be withdrawn and taxed when you reach a certain age. It is called a Required Minimum Distribution (“RMD”). Perhaps an IUL policy could be useful in this situation. A portion of your retirement money can be transferred gradually into your IUL. In this case, you could receive tax-free* funds from your IUL policy.

Selecting the Right Retirement Life Insurance

As people approach or reach retirement age, their financial needs can change. Retirees tend to seek out safer alternatives for their money over time rather than assume too much risk. Most of the time, this also applies to life insurance. When you were working, you may have been able to cover your family if you weren’t able. Since you have accumulated money for retirement, this goal may be secondary. 


However, protecting your family is still a priority. Additionally, retirement can bring new challenges, such as tax implications. Therefore, choosing the right retirement life insurance is important. An IUL allows you to meet both of these objectives.

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Key Advantages of Life Insurance

Using an IUL  offers many benefits to retirees including:


  • An IUL’s cash value is not reduced by market losses
  • Stock market indexes determine the growth of IUL cash values
  • The ability to protect what you accumulate
  • The option to choose how diverse you want your IUL indexes to be
  • Cash value grows tax-free*
  • The principal and interest are both tax-free*
  • It can be funded all at once or over time
  • There are no fees for accessing funds under the age of 59 1/2

Protect Your Legacy

Upon your death, your IUL can also provide you with the following benefits:

  • The total premium paid is less than the death benefit
  • *Death benefits are not taxed
  • Beneficiaries receive direct payments. And, there is no probate
  • The beneficiary can receive a lump sum or installment payments
  • Death benefits could increase over time
  • It is possible to accelerate a portion of death benefits for terminal or chronic illnesses

Learn More About Life Insurance in Retirement

Our team at Flying Eagle Financial is dedicated to helping you protect your wealth and legacy. 

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