The Meaning of Life… Insurance
One of the statements I make about life insurance is “the beauty is in the eye of the beholder”. As a tenured life insurance professional, I can say I love life insurance! It really is the Swiss army knife of financial tools. How you use it depends on what you are trying to accomplish. Even if things change it can add value and increase your odds of a positive outcome.
We are all aware of utilizing life insurance as an income replacement tool during your working years. Many believe you don’t need life insurance after the kids are grown, the house is paid off and you are retired. I find this short-term view of life insurance stems from three primary perspectives:
- You can out invest the life insurance policy
- Assumptions of future expected “need” without the consideration of the “value” of having it
- Staying away from permanent insurance because you don’t understand it
Your Life Insurance Policy Doesn’t Have to Retire When you Do, NAPFA Article
The Life Insurance Conversation™
Unlike any other insurance conversation your client has, the Life Insurance Conversation™ is different because death is not an if, it is a when. We think long about most of the planning we do with clients but often we think too short about life insurance.
Having paid-up life insurance in retirement can add value and increase the odds of a positive financial outcome. It may be used to offset the loss of social security or a pension when the first spouse dies. It may be used for long-term care if it included a chronic rider to do so. It can equalize assets or pay taxes due upon passing. It is a permission slip to annuitize other assets and not disinherit, or you can use the cash value for retirement income.
Benefits of integrating insurance products into a retirement plan, Ernst & Young Study