PUTNAM VALLEY, NY – 10 Jan, 2017 – Most people think about growing wealth and planning for future retirement income by investing in stocks, bonds and mutual funds, but there is another valuable asset that many are missing: life insurance. A recent report by USA Today (Sept. 15, 2016) has shown that a whopping 40 percent of Americans have no life insurance policy in place. Although many life insurance companies as well as buyers are primarily focused on the death benefit protection that this financial vehicle provides, life insurance can offer far more, including protection of principal, cash value accumulation, and certain tax advantages that make it truly different.
Ralph S. Adorno, principal at Ralph S. Adorno, CLU and Associates, with more than 46 years of experience in the life insurance industry, describes life insurance as being a “safe money tool,” one that has served businesses and consumers quite well for over 200 years. “It is commonly known that life insurance can be used for creating financial protection for those you love, as well as for leaving a legacy. But, with a properly designed policy, it can also offer a long list of living benefits, too,” Ralph says, “Including cash value life insurance in your retirement strategy can help to provide safety and stability, regardless of what occurs in the stock market, or even in the economy overall, allowing policyholder’s to plan ahead with much more certainty.”
In addition to providing an income tax-free death benefit to one’s beneficiary, certain types of life insurance can also offer tax-deferred accumulation, as well as interest, tax-deferred, on top of the funds that would have otherwise been taxed. This can provide the opportunity for funds to grow and compound over time.
When structured properly, life insurance can also offer income tax-free withdrawal of basis as well as loans and withdrawals to access to your cash value without incurring a federal or State tax if taken out prior to age 59 ½. Importantly, these accounts are not subject to required minimum distributions (RMDs) nor is there an income-based funding limit. This means that businesses or individuals who have “maxed out” their qualified plans, 401(k) and annual IRA contributions can continue contributing to a tax-advantaged financial vehicle. Their money can stay in a policy and continue compounding tax-deferred interest for a longer period of time.
Just like choosing any other financial vehicle, it is important to purchase the type of life insurance policy for your distinct objectives. That is because not all life insurance policies are the same. Throughout the years, life insurance has morphed into a much more “customizable” asset, so consumers can, in essence, build a policy for their specific desires – both for the short and longer term. For instance, a term life insurance policy will only provide death benefit protection and has no cash value element. Permanent life insurance, on the other hand, offers both a death benefit, and the ability to grow the cash value tax-deferred, as well as access to the cash value through the use of policy surrenders, basis withdrawals and/or loans.
Unlike most other financial vehicles, a life insurance policy’s death benefit is paid free of income taxation, meaning that survivors have access to 100 percent of the benefits that are paid out. Because of this, it can be very beneficial to the policyholder’s survivors and assist with building a family legacy.
Not all permanent life insurance policies will allow policyholder’s the same opportunity for growth, however, so it is important for consumers to choose a policy that takes their individual circumstances into account. It is vital to have a good handle on what one’s current and anticipated future financial needs may be, which can key into how much life insurance protection a person may want, as well as the amount of payments that may be needed in order to get on the path to reaching your savings goals. It is also worthwhile to work with a financial professional who specialize and fully understands these particular products.
As the baby boomer generation ages and more and more Americans retire every day, finding ways how to turn a lifetime of savings into a retirement income plan and tax-efficient legacy for your loved ones is more pressing than ever. “The objective is having all the income one needs while leaving a legacy for their family using the same dollar at the same time,” says Adorno. “A skilled expert and a life insurance plan can help you on your path toward financial freedom.”
Company Name: Ralph S. Adorno, CLU & Associates
Contact Person: Ralph S. Adorno
Phone: (800) 258-7608
Country: United States