Life Insurance
A life insurance policy provides a financial safety net for your family in the event of your death. There are generally two types of life insurance: term life insurance and permanent life insurance.
Term life insurance provides coverage for a specified number of years. It is primarily used as income replacement and is an inexpensive option for growing families.
Permanent life insurance provides policyholders with coverage for their entire lives, often building cash value that can be withdrawn for future needs.
Permanent life insurance is also used as a tax-advantage accumulation vehicle. The cash value component can earn interest and grow tax-deferred. The cash accumulation can be utilized for tax-free income distributions in retirement and help reduce overall taxation.
Annuities
An annuity is a contract between you and an insurance company that requires the insurer to guarantee principal protection and make lifetime payments to you, either immediately or in the future.
With the slow death of pensions in the workplace and the proliferation of 401ks, annuities are now the only way to convert modern retirement accounts into an income stream for life. They maintain the tax-deferred status of your existing account, eliminate market risk, and can provide the spousal benefits lacking in modern investment accounts.