Laurene Breitkreutz discusses how life insurance fits into retirement
Listen to the interview on the Business Innovators Radio Network: https://businessinnovatorsradio.com/interview-with-laurene-breitkreutz-founder-of-your-wealth-refined-discussing-how-life-insurance-fits-into-retirement/
Life insurance is often viewed through a narrow lens, primarily associated with the financial security it provides to beneficiaries after the policyholder’s death. This perception, however, overlooks a critical aspect of life insurance: its potential to offer living benefits. As discussed in a recent podcast featuring Laureen Breitkreutz, founder of Your Wealth Refined, life insurance can play a pivotal role in retirement planning and provide financial support during the policyholder’s lifetime, particularly in the face of health challenges.
The term “life insurance” itself can be misleading. Many people equate it with “death insurance,” thinking its only purpose is to provide a payout upon death. This misconception can lead individuals to dismiss the value of life insurance altogether, believing they are adequately covered or simply uninterested in acquiring more. This mindset limits their understanding of the diverse benefits life insurance can offer, especially as they plan for retirement.
As Laureen points out, the traditional view of life insurance fails to recognize its evolution and the various options available today. Modern life insurance policies often include features that allow policyholders to access funds while they are still alive, transforming the narrative from one of death benefits to living benefits. This shift in perspective is crucial for individuals who wish to incorporate life insurance into their broader financial strategy.
Living benefits refer to the provisions within certain life insurance policies that allow policyholders to access funds in the event of critical health issues or other significant life events. For example, many modern life insurance policies offer living benefits that can be utilized if the policyholder is diagnosed with a serious illness, such as cancer, or suffers an accident that results in permanent disability. In these scenarios, policyholders can access a portion of their death benefit to cover medical expenses, rehabilitation costs, or other financial needs.
This aspect of life insurance is particularly relevant for individuals planning for retirement. Health issues can arise unexpectedly, and having access to these funds can alleviate financial stress during difficult times. Instead of solely relying on savings or retirement accounts, life insurance can serve as a safety net, providing peace of mind and financial flexibility.
Laureen explains that life insurance is generally divided into two categories: term and permanent life insurance. Term life insurance provides coverage for a specified period, typically ranging from 10 to 40 years, and is often less expensive. However, it does not offer the same living benefits as permanent life insurance. Once the term expires, the policyholder must either renew the policy or seek new coverage, which could be problematic if their health has declined.
On the other hand, permanent life insurance, which includes whole life and universal life policies, offers lifelong coverage and the potential for cash value accumulation. One of the significant advantages of permanent life insurance is that it does not require the policyholder to undergo underwriting again, eliminating the risk of being denied coverage due to health issues later in life. This feature can be particularly beneficial as individuals age and their health may change.
In conclusion, life insurance is not merely a safety net for loved ones after death; it can also serve as a vital financial tool during the policyholder’s lifetime. By recognizing the living benefits associated with modern life insurance policies, individuals can better understand how these products fit into their overall retirement strategy. The ability to access funds in times of need can provide invaluable support, making life insurance a multifaceted instrument in financial planning. As more people become aware of these benefits, the stigma surrounding life insurance may begin to dissipate, allowing individuals to make more informed decisions about their financial futures.
Laurene shared: “It goes back to looking at what is it that you develop in your lifetime and so that you know how much cashflow you’re going to have coming into your bank account each month when you retire, because that’s the amount that you get to spend without running out of money. So, if you don’t know what that guarantee is, up a creek without a paddle.”
About Laurene Breitkreutz
Laurene didn’t take the traditional path into financial planning. She took the real one.
