How Can Life Insurance Be A Effective Retirement Plan For Individuals?

May 04, 2017/0 Comments

Most retirees regard a life insurance policy  as a means to provide a regular source of income to a breadwinner’s family members in event of his/her death during his/her employment years. However, what many of these individuals fail to realize is that it can also be an integral and critical component for their financial planning strategy post retirement. They need to understand that acquiring the right type of insurance plan with the necessary policy coverage can accomplish many objectives. It provides them with a stable source of earnings when they are unable to work, assist them in  managing their taxes effectively and provide a steady cash flow exempt from tax. In addition to this, it can enhance the returns on their investment portfolio and give their loved ones the peace of mind they deserve.

How Can Life Insurance Be A Effective Retirement Plan For Individuals?

Andrew Corbman is the President and founder of ASC Financial, Inc and has over 20 years of experience in offering viable financial planning and wealth-building strategic solutions to his clients for their retirement. This finance graduate from the University of Maryland says it is possible for people to use their life insurance policies as an effective financial plan for their retirement in the following ways:

  • Safeguard a person’s income source during retirement

Individuals need to realize that their life insurance policy has to be the basis for their financial plans during their retirement years if their family members depend on their income. When a person dies during his/her retirement, his/her spouse usually has a difficult time making ends meet. While expenses may fall, it does not compensate for the fall in the couple’s total income. This is because the social security benefits for the deceased individual ceases to continue. However, with a life insurance policy it is possible for the spouse to receive enough income to maintain his/her standard of living in spite of the loss of benefits from the State.

  • Ensure a person’s savings for his/her retirement are on track

Ten years prior to their retirement, couples find themselves pay more money on their insurance premium to ensure they have an adequate income source when they unable to work. If a spouse suddenly dies during such time, the surviving member may find that couple’s savings for their retirement are inadequate. This is the reason why it is necessary for all couples to take out a 15-year life insurance policy in names of both individuals in order to safeguard retirement saving plans. Moreover, the premium amount on such policies is also cheaper in comparison to other plans.

  • Enhances returns on investments and asset allocation

In the present economic scenario, most retirees find that the interest rates on bonds and certificate of deposits (CD) are very low and cannot to meet their financial needs. Nevertheless, these individuals need secure investments and other financial assets in their income portfolio for their retirement. Life insurance policies can accomplish this objective and are a viable substitute for bonds.

 Andrew Corbman says that the above factors prove that life insurance policies are indispensable for retirees to maintain their standard of living after their employment years.


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