rETIREMENT INCOME sPECIALISTS
When you hear the term “life insurance,” one of the first things that probably comes to mind is its
primary benefit: the income tax-free death benefit. Some of today's life insurance products offer the potential for so much more. If you are looking for an opportunity to diversify your tax implications in retirement, life insurance can provide you with supplemental retirement income, income tax free. Some insurance products allow for the ability to accumulate cash value inside of your policy. When you pay premiums into your policy, a portion of that money goes toward the costs associated with your policy. However, a portion is also allocated to help build cash value. The cash value can grow each year based upon the performance of an external market index. If the result is positive at the end of each policy year, you’ll be credited indexed interest, subject to the policy’s cap and participation rate. Caps and participation rates set the maximum amount of indexed interest that may be credited to the policy’s cash value during a specified period.
Ready to Explore New Possibilities?
Please contact Hunter Financial Services at your convenience for an initial consultation. We’ll work with you one on one to determine a roadmap to success. We look forward to working with you soon.
Be aware that most life insurance policies require health underwriting and, in some cases, financial underwriting. All guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.
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How does this benefit you in retirement? Section 7702 of Title 26 of the US Tax Code allows for policy loans and/or withdrawals to be taken from the available cash value on an income tax-free basis. The
benefit of this can be wide-ranging as you can use the funds from policy withdrawals and loans for life events and needs such as:
· Supplemental tax-free income
· College tuition for a child or grandchild
· Home purchase or renovation
· Travel
· Emergencies
· Any other financial goal that is important to you!
Keep in mind, any withdrawals or loans from your policy will result in a dollar-for-dollar reduction in both your available cash value and death benefit. Withdrawal amount over and above your total premiums paid could result in income taxation on any interest you’ve earned. In addition, if too much is withdrawn, it may cause the policy to lapse and may require additional premium payments to keep the policy in force. Therefore, it is important to manage your policy values to ensure that the policy remains in force. There are many carriers that offer various types of insurance policies. Each one will offer unique features, terms and conditions.