The two main types of Life Insurance are term Life Insurance and Whole Life Insurance policies of which you probably have some of each. As you near retirement and your children grow up and become self supporting, it is a very good idea to take a good look at your Life Insurance portfolio and decide which policies to hold onto and which to let go.
Term life Policies are relatively inexpensive and designed to provide the funds necessary to provide for your children and spouse in the event of you dying earlier than is expected and in particular while your children still need to be educated. Once your children have finished their studies and are self supporting there is no real reason to keep paying this type of policy, the money could be better used in your income creation investment strategy for retirement. Speak to your broker/insurance company and determine the best way to use these funds in your retirement planning.
Whole Life Insurance is a different structure and has an investment element which would have accumulated a lump sum as you near retirement. The most important thing about whole life policies are that the accrual is tax deferred or in some instances tax free.
It is also important to consider your capital needs against your income needs as you near retirement and perhaps the option of investing the cash value of your Life insurance policies into income producing funds like annuities that are flexible and due to the fact that they are not insurance based, offer a higher return.
Speak to one of our qualified consultants to discuss the benefits and tax implications of switching your life insurance policies to income generating funds to see you comfortably through your retirement.