We often see clients who are certain when they come in to see us they can eliminate one very big expense in retirement – paying their life insurance premiums.
Not necessarily.
Your life insurance, if it is the permanent kind with cash value in it (your money), can be used to supplement your retirement INCOME if it is set up properly. Most people do not regard this as an additional source of income because when they bought it so very long ago it was most likely offered as an added benefit but it seemed so far off, who cared?
The need for the face amount of the life insurance may be long gone in that your need to replace your income to your family is no longer an objective. But the cash value which has accumulated over the years, could indeed provide the resources to generate income you cannot outlive.
When you use your life insurance cash value for this purpose, it goes to decrease the face amount of the life insurance benefit to your beneficiary when you die. Since that may no longer be a big issue to you, you should have your life insurance program reviewed prior to retirement.
There may be some value to it you forgot about!
Photo Credit: David Hilowitz via Compfight cc
