Using Life Insurance for Retirement Income

Study Level: Advanced
Delivery Method: Online Self-Study
Field of Study: Specialized Knowledge/Retirement Planning
Prerequisites: There is no prerequisite for this course; however, an understanding of the features and living benefits provided by permanent life insurance (notably universal life) would be beneficial.

Course Description:
This all-video-based course features Paul Winn, CLU, ChFC, a nationally known expert on life insurance and life insurance planning. It presents the concept of using the cash values of a life insurance policy—notably universal life—to create supplemental retirement income through a regime of withdrawals and policy loans. The course explains how the concept works, how a plan is designed and, by using a case study scenario throughout the course, how such a plan is applied for the benefit of the client. 

The course describes how to structure the income so that it is received tax free (a benefit that derives from the favorable tax treatment of life insurance withdrawals and policy loans) and how it can enable the client to delay taking Social Security benefits and qualified plan distributions, thus increasing the amount of those benefits.  It also explores the risks to which a client is exposed when implementing such a plan. The course concludes with a discussion of the suitability factors that producers or planners must evaluate to ensure that any plan utilizing this concept is appropriate for the client.

Course Objectives:
This is an advanced level course. Upon completion, students will be able to:

  • describe the concept of how life insurance withdrawals and policy loans can be used to create supplemental retirement income
  • cite the reasons why the income is received tax free
  • demonstrate understanding of the benefits a client can derive from a supplemental income plan
  • apply their knowledge of the cash value withdrawal and policy loan features associated with permanent life insurance
  • assess the tax risk to which a client might be exposed if the plan is not properly implemented
  • identify the applicable suitability factors when considering such a plan for a client
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