Brad Walton talks about Life Insurance as a Retirement planning strategy
Contact the Walton Financial Group in Barrie to learn how to use Life Insurance asa Retirement Planning strategy
There is no secret to using Life Insurance as a Retirement Planning tool . There are different types of life insurance .A term life insurance policy stays in effect for a specific number of years, usually anywhere from five to 30 years. On the other hand, a whole life policy (a type of permanent life insurance) only expires when you cancel it. Otherwise, whole life insurance covers you for a lifetime.Whole life insurance tends to be more expensive than term life due to higher premiums. But the trade-off is that you’re accumulating cash value in the whole life policy. You can then borrow against or withdraw from that cash value later on. Depending the policy, you may also earn interest or dividends on a tax-deferred basis. Generally, you can borrow against the policy up to the amount of cash value you’ve accrued without taking a tax hit. If you’re receiving dividends, you won’t owe any taxes on them unless they exceed the total amount of premiums you’ve paid.
Each dollar or premium that you pay into a whole life policy is used for two things : 1. to cover the charges for the insurance itself . 2. to make a deposit into an accumulating fund within the policy . This is known as the cash value .
This cash value can be borrowed against in retirement using the policy as collateral and most banks are happy to do this . These loan proceeds are non- taxable
Speak to an investment advisor at the Walton Financial Group on Barrie Ontario to learn more about using a whole life insurance policy to plan for your retirement
