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How life insurance can evolve into retirement income
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The decision to purchase life insurance is often a simple one when you have loved ones who depend on your income. After all, it’s important to ensure that your family has what it needs financially after you die.
But while life insurance may seem like something you buy primarily for the protection of others, that’s not the only reason to purchase coverage. For example, your life insurance could also benefit you while you’re alive. And, in some cases, your life insurance policy could even evolve into a source of retirement income.
Find out how affordable a life insurance policy can be now.
How life insurance can evolve into retirement income
Here are a few ways your life insurance could benefit you as a source of retirement income:
The right life insurance policy can build cash value
“First and foremost is death protection, but in some policies, it gains cash value,” says Devin Graham, a WoodmanLife insurance agent.
That’s true for index universal life (IULs), for example. The cash value growth of IULs is based on the market, and IULs “can give the member the option of gaining up to 8% interest,” Graham says.
And, there are other cash value options, like whole life or permanent life insurance policies, as well. Whole life insurance policies typically aren’t tied to the stock market. Rather, these policies grow at a fixed rate set by your insurance company.
If you need income in retirement, you may be able to withdraw money against your life insurance policy’s cash value. You may also have the option to surrender your policy and receive the entire cash value. That cash value includes the money you’ve paid into the policy, plus interest, not including any associated fees.
Purchase a life insurance policy now to start building cash value.
Your premiums could be returned to you
Term life insurance is commonly thought of as a use-it-or-lose-it policy, but that isn’t necessarily the case. For example, you may be able to add a return of premium rider to your policy. That way, if you outlive your policy’s term, you can receive a refund for some or all of the premiums you paid while your policy was active.
Let’s say you purchase a 20-year term life insurance policy while in your 40s. That policy has $300 monthly premiums and includes a return of premium rider. If you haven’t used the death benefits tied to your term life policy by the end of the 20 years, you could get a refund of $72,000 (240 premium payments at $300 per month).
You may be able to sell your policy
You also may be able to sell your life insurance policy to life settlement companies. By doing this, you’ll receive a one-time cash payment for the sale of your policy.
However, if you take this route, it’s important to compare your options. Offers vary from one company to another.
And, because these companies are typically most interested in buying high-value life insurance policies from older policyholders, “you’ll probably need to have at least a $100,000 life insurance policy and be over the age of 65 to sell your policy,” according to the Texas Department of Insurance.
The bottom line
Life insurance can be an effective way to financially protect your loved ones after you die, but it may also allow you to supplement your income in retirement. If you choose to take this route, it may benefit you to look for whole life insurance or index universal life insurance to ensure that your policy can adequately supplement your income. If you choose a term life insurance policy, consider one with a return of premium rider so you get your money back if you outlive your policy’s term.
Aside from offering a supplemental source of retirement income, life insurance can also help cover the high cost of long-term care. For example, if you add a long-term care rider to your policy, you may be able to use a portion of your death benefit to cover additional healthcare costs if you develop a debilitating condition, which can cut down on your expenses during retirement.
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Israel accused of killing journalists in Lebanon strike and children as troops storm Gaza hospital
Tel Aviv — An Israeli airstrike killed three journalists Friday in southern Lebanon, in a compound that was known to be housing more than a dozen journalists from several organizations, according to Lebanon’s health ministry. Lebanon’s Prime Minister Najib Mikati called the attack deliberate and “war crimes committed by the Israeli enemy.”
The Israel Defense Forces did not immediately comment on the strike, but later said it was looking into it.
The three journalists were identified as two camera operators and one engineer who worked for media companies linked to Iran and the Lebanese group it backs, Hezbollah, which Israel has been in an escalating war with for a year. Hezbollah has long been designated a terrorist group by the U.S., Israel and many other nations.
The pre-dawn strike about five miles inside the Lebanese border obliterated a building and destroyed at least one vehicle labeled “PRESS.”
Ramiz Dallah/Anadolu/Getty
The Associated Press and other agencies said no warning had been issued before the strike on the guesthouse where the journalists had been sleeping.
The IDF reported five casualties of its own in southern Lebanon on Thursday, saying that Hezbollah militants came out of a tunnel shaft and began lobbing grenades, prompting Israeli soldiers to return fire.
The IDF says 22 of its soldiers have been killed in action in southern Lebanon since Israel launched ground operations there at the beginning of October.
Amir Levy/Getty
Israel’s military has also pressed on and ramped up its offensive against Hezbollah’s Hamas allies in the Gaza Strip since the killing of the group’s leader Yahya Sinwar earlier this month. IDF strikes killed at least 38 people in the southern Gaza city of Khan Younis, health officials in the Hamas-ruled Palestinian territory said Friday, with at least 14 children reportedly among the dead.
In the north of the enclave, Israeli forces stormed the last operational hospital in the area, the Kamal Adwan Hospital, after two other neighboring facilities went out of service in recent days. The hospital is in Beit Lahia, northwest of Jabalia, which has been a major focus of IDF operations in recent weeks.
Health workers said IDF troops entered the hospital in the middle of the night, soon after a World Health Organization delegation left the facility.
AFP/Getty
In a statement, the IDF said forces were operating in the area of the hospital “based on intelligence information regarding the presence of terrorists and terrorist infrastructure in the area,” and that they had “eliminated hundreds of terrorists” there. The IDF said it had evacuated about 45,000 Palestinian civilians before the operation.
Three Israeli soldiers were killed in the operations in northern Gaza, the IDF said Friday.
Amid the ongoing fighting in Lebanon and Gaza, U.S. Secretary of State Antonly Blinken was back in the region this week pushing for a peace agreement.
After his 11th visit to the Middle East in a year, Blinken was in London on Friday, where he was meeting his counterparts from Jordan and Qatar, along with Lebanon’s caretaker prime minister.
After his discussion with Jordan’s foreign minister, the State Department issued a statement saying Blinken had, “underscored the importance of bringing the war in Gaza to an end, securing the release of all hostages, and alleviating the suffering of the Palestinian people.”
On Lebanon, Blinken told Jordan’s Foreign Minister Ayman Safadiin that the U.S. remained committed to working with its regional partners “to establish lasting stability” by seeking a diplomatic resolution to the Israel-Hezbollah conflict based on an existing United Nations resolution.
Blinken has said that Israel cannot leave its troops in Lebanon for an extended period of time, and that the IDF has to do more to avoid harming civilians, Lebanon’s military forces and U.N. peacekeepers based in the south of the country.
Israel confirmed Thursday that it would send its spy chief David Barnea to Qatar on Sunday for another round of talks with U.S. and regional officials aimed at hammering out a cease-fire agreement. CIA Director Bill Burns is also expected to join the meetings, along with the prime minister of Qatar, which has served as one of the mediating countries over the past year.
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