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Secure Your Future: A Guide to Whole Life Insurance for Retirement Planning

by Busines Newswire
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When planning for retirement there are many strategies involved to arrive at a fail-proof plan. Whole life insurance is one of the widely used policies to protect both the insured and the beneficiaries. This life insurance policy is a type of permanent life insurance that is meant to provide cover till the policyholder passes away. Also, it is one of the strategies that can be used to plan for retirement. 

However, it might be tempting to feel that you don’t need life insurance once all your kids are grown and well-established on their own. Therefore, in this article, we shall explore ways you can incorporate whole life insurance into your retirement plan. 

How Whole Life Insurance Can Help Retirement

Many people, most of the time, do downplay the unique opportunity that whole life policy offers to policyholders who want to upgrade their net disposable income during their retirement. Here are some of the ways this policy can complement your portfolio of retirement assets.

1. Whole Life as a Risk-Buffer in Retirement

What makes the whole life policy stand out is that it is not dependent on the movement in the stock market. There is a mechanism under this policy that allows you to partake in the insurer’s underwriting profits and other profits from non-insurance products. Apart from profit sharing, there is a cash value component that grows till the expiration of your coverage. 

Therefore with whole life policy, you have a buffer to fall on in case other class of assets fails. For instance, if there is a stock market crash, you can easily meet your immediate financial needs by withdrawing from the cash value savings while allowing your stock portfolio to heal. Your investment in the whole life coverage gives you the leverage to wait deep in the stock market thereby allowing you to take advantage of a market rebound.

2. Whole Life as a Tax-Buffer in Retirement

It is possible that you don’t need whole life insurance during retirement, but its tax benefits might be worth considering. Painfully, many rich people are not aware of the similarity between tax incentives for whole life and a Roth account. Also, investment in this life insurance is without any limitations or entry barriers. There are no maximum contributions. 

Another reason why you may want to consider whole life insurance is that other sources of income are subject to tax in one way or the other. For example, all of these income classes get taxed by Big Sam; rental real estate, social security, deferred compensation plan, and several others.

The tax rate may continue to be on the rise on those assets but whole life policy is a source of tax shield for the rich who know its worth. 

3. Whole Life Insurance for Death Benefits in Retirement

Apart from the tax incentives and risk buffer features of whole life policy, the application of its permanent death benefit in planning retirement is huge. The death benefit is a lump sum paid to your dependents after you pass away. So, in a way, it provides financial security for the future of your loved ones. 

However, you may be wondering how that could benefit you while you are still alive. Here is how. If you have an assurance that your loved ones would be financially protected when you are gone, this will give you an opportunity to consume more of the other assets in your retirement asset portfolio. Thereby improving your quality of life as well as strengthening your longevity. Whole life insurance coverage allows you to enjoy your money while you are still here!

In addition, if you become extremely ill, you can fall back on the cash value savings associated with the life policy to foot the medical bills. It will prevent you from selling off other assets such as your shares.

Benefits of Whole Life Insurance

Many people have so many resentments about insurance generally. But this may be due to lack of knowledge of the inherent benefits of insurance policies to the insured and their loved ones. Let’s quickly consider some benefits of whole life insurance in particular. 

1. Financial Security: 

One of the benefits of the whole life plan is that it provides financial protection to you and your family. Also, its coverage starts from the day you subscribe to the policy till you pass away, unlike some insurance policies that only become operational after several payments of premiums. The untimely death of the insured will not prevent payment of the due death benefit.

2. Lifetime Protection:

This is another winning advantage of whole life policy. It guarantees your financial security and that of your dependents till death, usually over 99 years. Also,the premium cost is relatively cheaper compared to other life insurance policies. As a result, policyholders can purchase a large coverage that can take care of future inflation. This policy offers the opportunity to the insured to enjoy the return on investment while still alive.

3. Protection Against Health Risks

In life, there are many risks that people are exposed to on a daily basis. These risks can result in critical health implications. But most whole life policies offer life insurance riders that can help mitigate some of these risks such as terminal illness, accidental death, or disability. These riders are lifesavers that relieve your loved ones from high medical costs if you become bedridden. 

4. Lifetime Income

Whether you are rich or not, the lifetime income associated with the whole life policy can be utilized during retirement years to take care of many expenses to supplement other sources of income. It also serves as a buffer against inflation. 


After all is said and done, we can now conclude that whole life insurance can be the winning strategy in your retirement plan. Even if you feel you don’t need a life policy, its inherent benefits both in the short-term and long-term cannot be ignored. Some of these advantages discussed here include lifetime protection, protection against health risks, tax incentives, and many more.