For years, the idea of investing in life insurance has become more attractive as time passes because it is associated with guaranteed returns and peace of mind in any unforeseen circumstance.
If you’ve been offered this type of plan before by an agent, you’ve likely grown familiar with the whole “It’s a great way to save for the future” type of sales pitch. Although such an approach can seem like an outdated or overplayed attempt to get anyone to invest, the truth is that seeing valuable returns from a policy isn’t far-fetched.
Life insurance policies often make sense to young professionals who have their whole lives ahead of them because they grow valuable with each passing year. In the case of retirees who are nearing the end of their professional careers and guaranteed to spend the rest of their lives without income, such vehicles may not seem optimal. Well, unless you consider the right strategies for your permanent life insurance plan.
A step-by-step strategy worth following
Although it may sound complicated at first, there is much sense that lies behind the decision to use a life insurance policy for accumulating some financial padding during retirement. When utilized correctly, these plans can be used to accumulate compounded cash value over a relatively short period so that financial woes are eased, and there’s more emergency funding in the tank.
If you find yourself in need of a bit more post-career funds, here is a step-by-step guide that will help you use life insurance as best as possible for your retirement:
Step #1: Choose the right product to work with
Compared to just a few decades ago, today’s life insurance industry is chock-full of products that cater to different preferences and investor behaviors.
Depending on how much you have available and your future plans, there are certain policies and products that will be best suited to your needs and preferences. For instance, standard “money recycling” approaches for post-career funding would be best supported by a simple term life policy with an adequate death benefit.
(Are you looking for a term life policy that is affordable, easy to deal with, and bears the most value for money in the long run? The experts at EZ Affordable Health Insurance can help you!)
If you want to go with a different type of life insurance, you’ll need to consider different factors before making a final choice, such as:
- The cost of childcare and household management work that you’re currently dealing with
- The living expenses of your surviving family members
- The amount of coverage you’re willing to pay for in the long run
Step #2: Supplement your insurance with an emergency fund
After you’ve picked the best investment product for your retirement funding-related needs, it’s time to deal with another important decision that will affect your chances of racking up more savings: emergency funding.
When it comes to making money for your post-career lifestyle, you’ll need to start considering the possibility that an emergency fund will serve your needs well, even during tight situations. In fact, keeping a comfortable amount saved up is vital because it allows you to keep making your regular retirement contributions amid any unexpected bills!
While the ideal amount of money to save up depends on one’s needs, the rule of thumb dictates that an emergency fund must be able to equal at least six months’ worth of living expenses!
Step #3: Actively invest any remaining money you have
Once you’ve taken care of your insurance policy and emergency funds, the last part of your retirement funding and savings plan is active investment work. Suppose you have some money remaining after your contributions and other related needs. In that case, you can put it into different channels, such as a Roth IRA and mutual funds, or take the initiative to max out your 401(k)!
Although having as much money as possible is something that we’d all like to achieve when we retire, many people still overlook the fact that having the right investment strategy is critical for attaining such goals. Through the help of a dependable term life insurance policy and the step-by-step guide above, you won’t have to worry about falling behind on your funds!
EZ Affordable Health Insurance provides affordable life insurance in Jacksonville, FL, for retirees and forward-thinking professionals. Get in touch with us today to learn more about the other products that we have for your needs!