Insurance & Life Insurance: Client Education Series

Insurance provides both peace of mind and strategic long-term planning for you and your family.

Life insurance, in particular, can play a pivotal role in your overall financial strategy. It provides a safety net for your loved ones.

Below are six benefits that life insurance can offer your personal financial plan, especially as you prepare for retirement.

1. Protection for Your Family

The unexpected can happen at any time. Life insurance makes sure your loved ones can maintain their lifestyle, afford essential expenses, and avoid financial hardship. More importantly, life insurance provides cash, which can cover expenses such as paying off a mortgage or funding a child’s education, giving you peace of mind that they will be taken care of in the event of your passing.

2. Tax Advantages

If structured properly, cash value life insurance can be very tax-efficient.  The cash value grows tax-deferred and can be accessed tax-free through withdrawals and policy loans.  Lastly, the death benefit is income tax-free and can be estate tax-free depending on policy ownership.

3. Supplemental Retirement Income

Certain permanent life insurance policies accumulate cash value over time. This cash value can be accessed through tax-advantaged policy loans or withdrawals during retirement, providing a flexible source of supplemental income without the market risk associated with traditional investments.

4. Asset Diversification

Whole life insurance can act as a non-market correlated asset in your financial portfolio. While stocks and bonds can be volatile, the growth of cash value within a whole life insurance policy is generally stable and predictable, providing balance to your overall investment strategy. If, however, you desire market-based return potential, variable life and indexed life policies are available.

5. Business Planning and Continuity

For business owners, life insurance is a strategic business tool that offers personal protection. It can fund buy-sell agreements, protect against the loss of a key employee, or serve as an executive benefit plan. This helps ensure smooth ownership transitions and safeguards the company’s financial health.

6. Long-Term Care Planning

Roughly 70% of Americans aged 65 and older will need some form of long-term care services and support in their remaining years.* Some life insurance policies offer long-term care riders. These riders allow you to access your death benefit to help pay for nursing home, assisted living, or in-home care costs if you need them later in life, providing both flexibility and security.

Conclusion

Life insurance is not a one-size-fits-all solution. The right policy can serve multiple purposes, such as protecting your family, supplementing your retirement, diversifying your assets, and strengthening your business continuity plan.

At Alden Insurance Associates, we help you design a customized strategy that aligns with your unique goals, leveraging access to top-rated carriers and decades of combined expertise.

*Administration for Community Living. LTC: How Much Care Will You Need? Found on the internet here.