Unlocking the Value of A Life Insurance Policy

The past few years have witnessed a rapid swing towards sustained high inflation, catching many retirees off guard when it comes to their monthly income requirements. Adding to this challenge, income from investments has stalled, with stocks experiencing a prolonged bear market and bonds suffering their worst year on record in 2022 (CNBC).

The Impact of Inflation on Retiree Finances

“Inflation harms retirees as they generally live on a fixed income comprised of Social Security, pensions, and withdrawals from their retirement portfolios,” said Michael Fischer, director and wealth advisor for Round Table Wealth Management, in an interview with Forbes. “Sustained inflation over a number of years can drastically reduce your purchasing power, especially without cost-of-living adjustments in pension payments or strong investment markets to buy retirement accounts.”

As Mr. Fischer points out, for most retirees, income sources flow from three buckets: (1) Social Security; (2) Pension; and (3) Personal Assets (e.g., property, investments, etc.). But since social security and pension payments tend to be fixed, it’s this third bucket that has potential for boosting income without taking on too much risk.

AARP's insightful guide, "Where to Look for Late-Life Income," highlights various resources seniors can access to generate additional income.

Let's explore four common retiree scenarios and the suggested income sources:

1: Managing Significant Savings with Predictable Income

 "I've got money, but I'm not great at managing it." Seniors who have accumulated significant savings but struggle with cash flow may consider a financial option that provides a predictable monthly income. AARP recommends exploring an annuity or a CD ladder, which converts a lump sum into reliable income for the years ahead.

2: Unlocking Cash Flow from Home Equity with a Reverse Mortgage

"I'm house-rich but cash-poor." For seniors with substantial home equity but limited liquid assets, a reverse mortgage can be a viable solution. Understanding the product details is essential, but many retirees have found that reverse mortgages are an effective strategy for unlocking cash flow from their residential property, especially in the later years of retirement.

3: Safeguarding Against Future Long-Term Care Expenses

"I just know I'm going to need costly long-term care someday." Seniors concerned about being financially unprepared for future long-term care (LTC) expenses can consider two primary insurance options: traditional LTC insurance or a hybrid policy that combines life insurance and LTC coverage. Although this coverage may be costly, it offers peace of mind for those vulnerable to future long term care expenses.

4: Protecting Against Outliving Savings with Longevity Insurance

"Chances are good I'm going to outlive my savings." Outliving investments are a common retirement fear. In such cases, AARP suggests considering longevity insurance, such as deferred-income annuity products. These products provide a guaranteed monthly income stream past a certain age, such as 80 or 85.

Life Insurance Settlements: Unlocking Cash from Life Insurance Policies

Another often overlooked income source in later life is a life insurance policy. Many seniors are unaware that a life insurance policy is considered private property that can be bought and sold like any other asset.

If it is determined that a life insurance policy is no longer needed, affordable, or serving its original purpose, then selling it for a cash payment may be an option. Welcome Funds specializes in life settlements, representing seniors who sell their life insurance policies to licensed financial entities known as life settlement providers. In return, a lump-sum cash payment is received that helps bridge the gap between monthly income and increasing personal expenses.

Welcome Funds: Your Partner in Life Settlements

Welcome Funds is a licensed and experienced life settlement broker committed to representing the best interests of its clients. Our team will review a life insurance policy, assess its eligibility, and provide honest, professional advice on whether to keep the policy as is, consider a new and improved policy or explore the possibility of a life settlement.

Contact Welcome Funds Today

To obtain a no-obligation, free life insurance policy appraisal, please contact Welcome Funds today. We are happy to answer any questions and discuss the life settlement process.

Call us at 877.227.4484 or visit our website at www.welcomefunds.com.