Pre-Retirement

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Life Insurance - Not Just For Death Benefits

Did you know life insurance can also serve as an asset?

By Brandon Schleter

As you know we've been covering life insurance for all life stages this month, in conjunction with Life Insurance Awareness Month. For a recap, check out life insurance in your 20s, life insurance for newlyweds, andlife insurance for new parents.

Today, I want to talk a little about life insurance for pre-retirees. These are the folks whose kids are older, they're farther along in their careers and have (hopefully) built up some hard assets. At this point, we see many clients who are considering letting their life insurance lapse, or they already have, since the kids are older and they've got some money in the bank.

Some clients simply don't want to go through the health exam that the underwriter will want them to repeat in order to get a new plan, or perhaps they have, and the costs have gone up. Life insurance, like car insurance, is one of those expenses that can feel like a waste of money if you're still alive, or your car hasn't caught on fire (like my father's did last winter!).

However, at this point in the conversation, we usually bring up whole (or permanent) life insurance as an option many pre-retirees aren't aware of. By converting some of that term policy to permanent (at a higher premium), it can become as asset, and not simply something to provide a death benefit. As we sit down with these clients each quarter and re-evaluate their portfolios and risk tolerance, permanent life insurance can be part of the bond portfolio, but that also happens to pay a death benefit.

We've seen clients build up a significant cash value in these policies that can be used as an additional asset during their lifetime. Dividend earnings can either grow the death benefit or add to the policy's cash value - or both, as the cash value grows over time with the insurance company's underlying investments. Our team can help you pick the policy that best fits your needs. This cash value can then be accessed to pay for kids college, a vacation home or any other life expense or goal. Just be sure to call us first, so we can walk you through how this could affect your policy.

So before you let that term life insurance lapse, give us a call and let us go over your options with you. That policy could serve as an actual asset to you - not just a monthly money-sucker. We're always here to help. 

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