What is an Investment-Grade Insurance Contract?

Investment-grade insurance contracts allow you to not only make tax-free investments but use your money when you need it. You can put your money away, build interest, and earn compound interest, with little to none being shared with the government. You can also leave money to your heirs without subjecting it to income tax, so it can accumulate, be distributed, and have your death benefit passed down without any additional taxes. As one of the most reputable retirement planning companies in Bucks County, PA, Lehigh County, PA, Camden County NJ,  Burlington County NJ, Somerset County NJ, and Mercer County NJ and its surrounding areas including Delaware, Secure Retirement Strategies is proud to offer these plans as great methods of retirement planning.


Unlike more traditional retirement accounts, such as IRAs and 401(k)s, investment-grade insurance contracts can grow without stock-market risk, while still offering competitive growth. There are no penalties for using your money, and a permanent and guaranteed death benefit beyond the cash value is included. That death benefit can also be accessed in part to pay for assisted living for long-term care and chronic-care expenses while you’re still alive.


All of these tax benefits are possible because the accounts are purchased with after-tax dollars. Instead of writing off your premium contributions as if you would with other retirement accounts, you are losing immediate but small tax advantages of a qualified account in exchange for these more considerable, long-term tax benefits.


Once your money goes into investment grade insurance contracts, there is a great chance that no part of it will ever be subject to taxes again. A few exceptions, however, would apply if your overall health does not qualify. Despite this, you can still be the owner of the contract and can use this strategy if you have a spouse, child, or key employee who is insurable.


Well, Why Haven’t I Heard of This?

Life insurance has primarily been used for its namesake – insuring lives. It was designed to provide for survivors by replacing the deceased income that loved ones might have been reliant upon. With cash-value life insurance, you would not only buying a death benefit, but also accumulating a cash reserve you could use while you were alive – such as an emergency fund or another retirement account. Because of the substantial tax benefits that life insurance contracts have over traditional investment vehicles, however, investors started using it as a means of investing as opposed to its original purpose of insurance.


While typical life insurance plans have more of your premium going towards the death benefit, investment-grade insurance contracts put more premium toward the actual cash value. Under this plan, your money is invested as opposed to just being set aside for your loved ones, with the same tax protections that other insurance contracts will have.


What Are The Tax Benefits?

Wealth accumulation comes in three stages – the accumulation stage, the distribution stage, and the wealth transfer stage. This cycle includes earning money and putting it away, pulling money out of the account, and passing on what is left to your survivors. Let’s compare what happens in each stage with regular life insurance plans against what you will get with an investment-grade insurance contract.

This All Sounds Great. How Do I Sign Up?

That’s easy – reach out to Secure Retirement Strategies! With all of our retirement investment plans in  Bucks County, PA, Lehigh County, PA, Camden County NJ,  Burlington County NJ, and Mercer County NJ and its surrounding areas including Delaware, we start with how much money you can afford to put away each month. We then write the contract with the near-minimum amount of death benefit to cash value ratio allowed. When done this way, most of your money goes to you with fees and commissions minimized, while still reaping the benefits. To get started, contact Secure Retirement Strategies today.