Life Insurance – Peace of Mind and Retirement

Legacy Life Insured provides peace of mind by ensuring your loved ones will be cared for after you pass away. It can also help fund retirement if you have a policy with an investment component.

It’s important to consider various factors when choosing the right life insurance. A financial professional can help you make the right decisions.

Peace of mind is a state of inner calm or tranquility that allows you to feel at ease, even in the face of uncertainty. It’s a feeling of being content and secure, and it can help you feel more relaxed, less anxious, and more centered – especially in today’s stressful world.

Life insurance provides peace of mind by ensuring that your loved ones will be financially taken care of in the event of your death. It is often one of the most cost-effective investments you can make, with premiums typically a fraction of what your beneficiaries would receive if you were to die.

If you’re considering life insurance, working with a financial professional who can listen to your needs and help you evaluate the best options for your situation is important. At Guardian, we take pride in taking the time to understand your needs and goals before recommending life insurance coverage. We work with you to find a policy that fits within your budget.

We offer various life insurance policies, including term, whole, and universal life. Term life insurance is a temporary coverage that can provide your loved ones with a lump-sum benefit upon your death. It’s often affordable, especially if you purchase a large enough policy to cover your longest financial obligations and allow for a good amount of buffer in case of an unexpected death or disability.

A permanent life insurance policy offers more flexibility in the long run, with no set expiration date. The policy can accumulate cash value over the years, and you may be able to borrow against it in some cases, depending on your particular policy’s terms.

If you’re in a hurry, you can apply for a simplified issue life insurance policy that does not require medical underwriting or a physical. Instant life insurance is similar to a simplified issue, but you can apply online and receive a decision within minutes. Guaranteed life insurance is another option, offering you a higher coverage amount than your employer’s group life insurance policy and no medical questions.

Whether you plan to retire soon or not, life insurance can help provide your loved ones with the funds they need to cope with your death. Funeral expenses, outstanding debt, and estate taxes can be costly. Fortunately, beneficiaries can receive a lump sum payout to cover these expenses. This is especially important if you have children or a partner who relies on your income.

In addition, many permanent life insurance policies build cash value over time. While these policies can be more expensive than term policies, the cash can provide additional resources to help with unexpected costs. However, consulting a fee-only financial planner or insurance consultant is important before withdrawing or borrowing from your policy’s cash value.

For some, keeping life insurance into retirement is also a matter of preserving their savings. Many non-spousal beneficiaries who inherit IRAs or other investment accounts will face tax bills that can be significant, and life insurance can be an effective tool to offset these taxes.

The amount of coverage you need in retirement may change as your lifestyle changes. For example, if you entertain guests often or add a pool to your home, you might need higher liability limits. Similarly, moving to a new state may require a review of your property and casualty insurance.

Suppose you have an existing term life policy that expires around your retirement. In that case, consider converting it into a whole or universal life insurance policy. However, it is important to note that your premium will likely increase, and it may be difficult or impossible to obtain a new policy if you experience health problems or are overweight.

Calculate your death’s projected financial loss when deciding on the coverage you need. This will give you an idea of your family’s needs and help you select the right type of policy. Typically, you can find a policy that suits your needs at a price you can afford with a few simple adjustments.

Life insurance policies can help provide a tax-free death benefit and cash value. Unlike other investment products, such as IRAs and 401(k) plans, the IRS doesn’t require policyholders to pay yearly taxes on the growth of their cash value. This allows whole life insurance policyholders to save more than they could with a regular savings account or bank CD, which would otherwise be subject to income taxes each year.

Many whole-life policies also accumulate interest, which helps to grow the policy’s cash value over time. This real-life insurance plan feature can be especially useful for people wanting to make the most of their investment dollars. It’s common for a policyholder’s cash value to exceed their cumulative premiums, and this is a great way to use the money without incurring any taxes.

When accessing the cash value in a life insurance policy, certain rules must be followed to avoid a tax bill. The IRS considers any amount of a life insurance policy’s cash value taken in through a loan or partial surrender taxable, but only up to the policyholder’s cost basis. The cost basis is the total amount that the policyholder has paid in premiums, and it increases each time a non-taxable withdrawal or loan is made from the policy.

Suppose a life insurance policy owner decides to sell their policy. In that case, the IRS will consider any amount received as taxable income, and the excess over the cumulative premiums may be subject to an excise tax. However, a tax-free exchange can be an excellent option for those looking to reduce their income tax liability in a given year.

Some life insurance policyholders also donate their life insurance proceeds to charitable organizations, which is a great way to support a cause they believe in and lower the taxes they pay in a given year. A life insurance policy can also be used to reduce tax bills, and this is an ideal strategy for those in higher tax brackets during their working years and who expect to be in a lower tax bracket in retirement.

Whether you need to provide your loved ones with financial protection against a health event, a source of supplemental retirement income, or both, life insurance offers several tax-efficient benefits. Life insurance premiums are generally not taxable, as are the cash values that accumulate within permanent life insurance policies such as whole or universal life. However, withdrawals, policy loans, or surrendering the policy in exchange for a lump sum payout may generate taxable income for the beneficiaries.

Withdrawals or policy loans from a life insurance policy are not taxable as long as they don’t exceed your “policy basis.” Your policy’s cost basis is the amount you have paid in premium payments over time. Your beneficiary will receive the full life insurance policy’s death benefit minus any outstanding loans or withdrawals upon death. Generally, you are only liable to pay taxes on money above your policy’s cost basis earned from interest or investment gains.

If you cannot afford to make the required monthly premium payments, some life insurance policies allow you to use the cash value in your account to continue your coverage. While this option can be costly over the long run, it will enable you to avoid terminating your life insurance coverage because of insufficient funds.

While this option can be appealing, it’s important to remember that it can seriously affect your family’s financial stability. In addition to losing out on the death benefit, you will also miss out on the investment opportunities that come with a life insurance policy’s cash accumulation account.

Some life insurance policies, such as whole and universal life, can grow their cash accumulation accounts through investments. These investments are typically based on the provider’s experience, current market conditions, and investment options. This can be an attractive feature for people who want the security of a guaranteed death benefit and the flexibility of being able to withdraw or borrow from their policy’s cash value. However, the return on these investments can be volatile, so it’s important to consult your life insurance professional before choosing a life insurance policy with an investment component.