How can life insurance provide protection in Retirement Income Distribution?

Life insurance can provide many benefits for the beneficiary(ies) of the insured. The death benefit is generally income tax free to the beneficiary. It can be used to provide for final expenses and needed cash at death. Life insurance can be used to replace income for the spouse from a lost pension or Social Security ...benefit. Life insurance proceeds can be used to fund a trust for children’s health, education, maintenance, and support. Other needs may include funding special needs trusts or providing charitable gifts.

Life insurance can be used to fund a buy-sell agreement for business continuation. Life insurance can be a great tool to pay estate taxes that are due. Permanent life insurance can also provide income in situations where the policy has been properly funded. The cash value of a life insurance contract can be put into a payment option to provide an income stream. On a properly funded permanent life insurance contract, clients can also use policy withdrawals and/or loans to provide an income source. Any cash withdrawal or loan can reduce the death benefit on the life insurance policy.