Why Should Pre-Retirees Consider Whole Life? 3 Reasons.


1. Maximizing Retirement Income

Issue/Concern: If you work for a municipality or an employer with a defined benefit retirement plan, you will be asked to make an irrevocable election on how to receive your pension.

Whole Life Insurance as a Strategy: Selecting the 'life only' option for a defined benefit plan, or other form of a pension plan, distribution should be explored. Depending on age, health status, and other factors, the 'life only' option when combined with privately held whole life insurance, can provide greater net, after tax income to the retiree and survivor.

2. Long Term Care & Heath Insurance

Issue/Concern: What is Medicare A & B? How do I enroll? What if I suffer an extended illness or injury in retirement, will Medicare cover? Long Term Care insurance is expensive…is it worth it? How do I afford it all?

Whole Life Insurance as a Strategy: Whole life insurance's income tax free death benefit can provide cost recovery for health and long term care expenses not covered by Medicare and/or other public or private programs. Simply, if the family uses debt to pay for the high costs of long term care and/or final health care expenses, the proceeds from the death benefit can be used to pay off the loans.

3. Market Volatility

Issue/Concern: Like most workers, you probably also save in your company's 401(k) plan, depositing more funds every pay cycle into the stock/bond marketplace subjecting yourself to increased market volatility.

Whole Life Insurance as a Strategy: Whole life insurance provides diversification away from the market with it's fixed cash value components. Typically, the guaranteed and non guaranteed growth elements of a properly funded, competitive whole life contract will deliver competitive internal returns.

This publication is offered for the purposes of education and information only and should not be considered tax or legal advice. For more information on your specific situation, please consult your legal or tax advisor. Neither Guardian, nor its subsidiaries, agents, or employees provide tax or legal advice.