Some say that whole life insurance only makes sense for the ultra-wealthy. Believe it or not, one of the top-ranked websites for personal finance makes this claim about whole life insurance, “…such policies usually only make sense for individuals with a net worth of at least $11.4 million” (estate tax exemption threshold).
Uhhh…not sure how they reached this conclusion and of course reading horrible misinformation about whole life insurance is not uncommon.
We’re using that quote as an example of what the internet views as being authoritative information about whole life insurance. By the way, the article where it was pulled from promises to discuss the same topic I’m writing about here.
However, I’m pretty sure if you read their article next to this one, you’d swear we’re not even talking about the same thing.
Why Would Anyone Want To Use Whole Life Insurance For Retirement?
If you’re asking this question, you’re one of those curious people that we welcome with open arms to this website. A major reason that we’ve kept after producing content here for over eight years (you read that right) is that we both tend to have contrary viewpoints.
It’s not that we’re disagreeable for the sake of it. Not at all in fact.
But we have a unique perspective to offer you having been trained by large mutual companies that specialize in selling participating whole life insurance. We’ve both been licensed to sell securities (stocks, bonds, mutual funds, etc.), had some experience in the wholesale distribution side of the financial services industry as well and one of us owned an RIA at one point as well.
Having done all of those things and experienced the sausage-making process of financial planning and retirement planning, we reached the semi-educated conclusion that whole life insurance can, in fact, be used for more than paying estate taxes. It also serves a purpose for people who aren’t “ultra-wealthy”. In fact, most of the people we help are far from ultra-wealthy. Most earn above-average incomes and are definitely way above average with their level of financial discipline.
With that experience, we’ve narrowed down three distinct ways that whole life insurance can be used in retirement. These are not the only uses for whole life in retirement.
But these are the three that can have a direct impact on retirement income which we have found to be the most popular discussions from our clients and potential clients.
We’re going to look at the following three ways that you can use whole life insurance for retirement: