When we first started working in the United States, we were introduced to plans for retirement accounts. These retirement accounts are often tax-advantaged to varying degrees. The most common accounts we use to save money for retirement are 401(k) accounts or IRA accounts.
However, if we only use this “basic” solution to solve our lifetime retirement income, not only the income channel is too single, but the risks we face are not dispersed enough. In real life, we will supplement the 401(k) account or IRA account with a life insurance policy that uses cash value (Cash Value, cash value in Chinese). Such a combined retirement strategy will provide us with greater financial flexibility, and at the same time, provide financial protection for our spouse and children. It is a common “upgrade” plan for US dollar retirement income planning.
Life insurance with cash value is different from term life insurance. In the column of the American Life Insurance Guide Network, it is pointed out that term life insurance is a pure consumer product with only the function of compensation. Life insurance with cash value is an “account” opened with the insurance company. We can “deposit money” into the policy account and use this “deposit”. The tax benefits offered by cash value policy accounts also benefit us and everyone in the family.
Using cash value life insurance (Cash Value Life Insurance) to supplement and enhance our retirement income has the following 4 advantages:
- Provide financial security for family members
When we unfortunately encounter an accident, life insurance with cash value (Cash Value) will provide our family (beneficiary) with a tax-free compensation. Beneficiaries are free to use the money to avoid the financial hardship that would result if we were no longer able to provide for the family. US Life Insurance Guide, for example, could use the money to pay for a mortgage, future school fees for children, or daily living expenses.
- DeferredDelayedTax value-addedPotential
A life insurance account with cash value provides the potential for tax-deferred appreciation, so we can use it as a financial channel to invest in the future. When we apply to open a life insurance account with cash value, part of the premium is put into an investment strategy for compound interest growth with “tax benefits”. Life insurance with a cash value is especially attractive if you’ve maxed out your 401(k) or IRA, or are looking for other ways to manage your money with the “tax-deferred” advantage.
- tax-freesupplementsreplenish income potential
We can withdraw money from a cash value life policy account “tax-free” by borrowing against the policy or withdrawing the principal. Therefore, after professional policy design, the Cash Value life insurance policy account can form a stable source of retirement income.
At the same time, the method of borrowing and withdrawing the principal is also flexible in terms of time-whether before retirement or after retirement, we and our family members can take money from the balance of the cash value of the policy to deal with accidents in life.
- Advantages of Risk Management
Using a Cash Value (Cash Value) life insurance account can help us diversify our investment and financial portfolio. With the “policy account”, it is possible to reduce the overall volatility of the investment and financial portfolio and the risk of loss. The specific use method is determined by the type of cash value life insurance. Readers can visit the introduction of American insurance types on the American Life Insurance Guide website. Learn more about it. In addition, some new types of insurance policies allow us to allocate funds into index accounts that earn interest in part based on the performance of major stock market indices. The interest rate of these accounts is guaranteed and will not be lower than a set level. Such an insurance guarantees that our cash value portion will not be affected by market declines.
SummaryConclusion
If we’re looking for the ideal tool that not only handles life’s surprises, but also protects ourselves and our families financially, while also being a tax-free source of supplemental retirement income, then consider A U.S. life insurance policy with cash value. Before applying for insurance, American Life Insurance Guide Network recommends that you learn and master the relevant knowledge and tips of American cash value (Cash Value) life insurance policies in advance, and cooperate with a professional life insurance broker to customize The way to achieve the goal of finding the product plan that best meets our current financial situation and actual needs. (Finish)
