Many people are familiar with the concept of a life insurance policy, but not everyone knows about the benefits of a life insurance retirement plan (LIRP). In this video, we’ll explain how a LIRP can help you grow your cash value while also providing a death benefit for your loved ones. We’ll also show you how a LIRP can be a great way to supplement your retirement income. If you’re looking for a way to provide for your family and secure your financial future, a LIRP may be right for you.
Hi, my name’s Phil Lorenzon, I’m the Lead Analyst here at Secure Retirement Strategies.
And today I want to talk to you about the relationship between the cash value of your LIRP and the death benefit. And they really are connected quite closely.
The death benefit is established the first day you make your first premium payment.
Typically it’s a multiplier of what that first premium is.
The cash value is going to grow over time. It’s going to grow as you put more premiums into the policy. And it’s going to grow along with the indexing growth of your policy.
For example, tracking the S&P 500 from the day you make your first premium to one year later, whatever the market is up, you’ll get credited up to a certain level.
However, if the market’s down, you’ll take a zero, meaning you won’t lose any value of your accumulation in the policy.
Now the accumulation value and the death benefit are linked very closely, in that as your accumulation value increases, it will eventually catch up with the death benefit. At which time the death benefit will start to increase as well.
By regulation, the death benefit can never be less than the accumulation value. So remember, at Secure Retirement Strategies, we’ll properly structure your LIRP to ensure that it complies with IRS regulation, maintaining its status as a life insurance policy.
Now, once you start taking tax free income from the policy that will reduce the cash value.
Once you reduce that cash value, you also want to reduce the death benefit, because if you were not to reduce the death benefit, you would start paying for more and more death benefit, increasing the expenses inside the policy.
So by reducing the death benefit, we can maintain low expenses and continue to maintain an accumulated value so that there’s money there for you to continue taking tax free income throughout the course of your retirement.
We look forward to meeting with you to properly structure your LIRP.
For more information, please visit us on our social media sites as well as our website at www.srsstrategies.com, and we look forward to structuring your LIRP, securing your retirement.