Life Insurance Retirement Plan (LIRP)

Description
As a life insurance policy designed to take advantage of tax treatment of life insurance, it is suited for investors with high income, which may exclude them from participating in Roth IRAs. A LIRP can provide a long-term accumulation vehicle for supplemental retirement income. In addition, at your death, it offers a benefit to help replace lost income for those who depend on you.

Objective
To provide investors supplemental retirement income via a life insurance policy featuring market appreciation, tax-deferred accumulation, and a life insurance death benefit.

Suitability
Variable Universal Life insurance is often used as a vehicle for a Life Insurance Retirement Plan. Over-funding a policy is best suited for investors already taking full advantage of other tax-advantaged ways to save for retirement. A LIRP is an option for those investors wanting to invest more for retirement once they have reached the contribution limits on qualified plans.

Product Features

• Earnings grow tax-deferred
  Payouts can be structured to provide an income
• Owner can structure tax-free payout from policy withdrawals and loans
• Death benefits paid to the beneficiaries are income tax-free
• Contributions should be made for at least 10 years
• Policy cannot lapse or all loans become immediately taxable
• Usually have a surrender charge in the first 10-15 years
• Must be insurable
• Death benefit included in the owner's estate, if the owner is also the insured and dies