Broker Check

Insurance Planning

Risk management includes working with a financial professional to prepare for unplanned events. Some risks are known, such as everyone’s eventual death but not when they might occur for each person. Other risks, such as a wildfire that destroys a house may happen without warning.

It is wise to be prepared and think about your family and loved ones who might be left behind and the chances of you needing long-term care.

Life insurance is an investment made for the ones you love. The proceeds from life insurance may cover outstanding loans, such as the mortgage on a principal residence, so your family has the possibility of stay in their home after you die. Life insurance may replace lost income and serve as a tool for extending the operations of a family-run business even if you are gone.

Long-term care planning is an essential consideration for Americans who are living longer. That is why we offer both life insurance and long-term care planning as part of our services.

Life Insurance Planning

Wealthy people who max out their contributions to their individual retirement account ($6,000 per year in 2021) and 401(k) ($19,500 per year in 2021) may consider life insurance for further retirement and tax planning.1

Life insurance may function in a tax-advantaged way to supplement retirement income. While paying premiums for whole life insurance, the policy may accumulate a cash value that grows over time as a tax-deferred benefit. In the event of the policyholder’s death, the total life insurance proceeds from the death benefit are paid tax-free to the beneficiaries. After retirement begins, any accumulated cash value in your life insurance policies may be helpful to provide a supplement to other retirement income from your IRA, 401(k) or any pension plans you may have.

The main advantages of life insurance are:

  • Tax-free death benefit.
  • Retirement distributions may be tax-free.
  • The growth of a life insurance policy’s cash value is tax-deferred.
  • It is possible to preserve the cash value of a life insurance policy from creditors.
  • It is possible to borrow from the insurance using the policy’s cash value at a modest interest rate without incurring any withdrawal penalty.


A single-premium annuity with one payment secures a steady income for retirement later that may be available for long-term care.


Medicare is available to anyone age 65 and older, regardless of income or assets.2 Medicare may cover certain short-term stays in a skilled nursing facility. However, long-term care is not an expense covered by Medicare.


Medicaid is only available for those with income and assets below a certain amount.

Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consult with a qualified tax or legal advisor.

LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.

Have a Question?

Thank you!