Using “Living Benefits” to Fund the Unexpected

As a risk consultant, it is my job to help clients identify, prioritize and manage risk. Often this includes asking the tough questions, digging deep and helping clients realize and plan for non-traditional risk exposures.

What will you do if you suddenly develop an expensive chronic illness, Johnny gets into that pricey Ivy League school, a worthwhile investment opportunity comes your way, or if an unexpected financial emergency hits your family? Many people may not know that a life insurance policy can provide cash accumulations that allow you to enjoy “living benefits,” and pay for those unexpected expenses without significant tax burdens.

Permanent life insurance policies can allow policy owners to borrow against the cash values to provide the funds needed to:

  • Invest in a business or commercial property.
  • Handle a financial emergency.
  • Serve as collateral to secure a loan from a bank.
  • Pay college tuition costs.
  • Supplement your retirement income.

Additionally, the death benefits of these plans still provide critical protection for your family and the quality of life that you have built for them, during your working years.  As I have discussed in earlier blogs, properly designed cash accumulation life insurance policies also help protect your retirement portfolio against market volatility and minimize income tax liability at retirement.

While this approach helps clients gain the peace of mind knowing that they can access cash needed to fund the unexpected costs of tomorrow, it is critical that the life insurance policy is properly designed and managed to avoid unintended tax consequences. To learn more about the living benefits of a life insurance policy you can read more in the Kiplinger article “Cash From Your Life Insuranceor contact me at hpurvis@rcmd.com.

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