All life insurance plans have one thing in common — they provide money, called a death benefit, to beneficiaries when the policyholder dies. Only cash value plans can be integrated into a retirement plan because they allocate a portion of your premium payments into a savings account.
Deciding how much income your family will need when you pass is an important factor in considering whether to use life insurance as part of your retirement investment strategy. Your personal financial situation and goals will largely determine your strategies for building retirement funds.
For instance, if you’re accustomed to a comfortable standard of living you’d like to maintain in retirement or plan to travel extensively, you might want to consider contributing extra funds to an LIRP whenever possible.
Keep in mind that life insurance premiums can vary dramatically based on the age and health of the applicant. Permanent policies have much higher premiums than “temporary” policies like term life plans. The younger and healthier you are, the lower the cost of a permanent life insurance plan. The face value of the policy, where you live, your occupation and your lifestyle will also factor into the price of premiums.
We suggest requesting a quote from our best life insurance companies to learn more about your specific costs.