Why Life Insurance Becomes a Better Opportunity?
So what are you supposed to do with the money in that IRA?
You can still leave it to the kids or grandkids – that hasn’t changed.
All that’s changed is the vehicle for getting it to them. It’s far more efficient for you to withdraw your qualified money and buy a cash value life insurance policy. This creates an income-tax-free death benefit for the kids or grandkids, free of probate. Plus, in most states, some or all of the death benefit is protected from creditors (as long as the insured didn’t file for bankruptcy).
Another benefit?
Cash value policies with an LTC rider can act as a hedge against the need for long-term care. If you don't want to commit to buying expensive stand-alone LTC coverage, spending a fraction of that cost on an LTC rider allows you to dip into the policy's death benefit later, should you need it. Even if you prefer all that money to go to the kids, in these uncertain economic times, it never hurts to have a plan B. If you were confident about self-insuring before the COVID-19 pandemic's economic fallout, you may not feel the same way right now.