Once you’ve retired, do you know what to do with your life insurance? A lot of people may think they don’t have a use for it after their retirement begins, but some policies come with an important type of benefit that could give you good reason to keep it, according to a Santa Clarita financial advisor.

While not all policies are designed the same, those that come with what’s called “living benefits” actually allow the policyholder to access funds in the case that they become sick with a critical, chronic or terminal illness.

Show Host Arif M. Halaby

“It gives you a chance to pull out some or all of the face amount, which is the death benefit that would be paid to your beneficiaries,” explained Arif Halaby, a Certified Estate Planner and host of “Total Financial Solutions Safer Money Hour” on KHTS AM-1220. “So $200,000, $500,000, whatever that big number is, it allows you as a person who is alive to get pieces of that.”

These tax-free living benefits are usually paid on a monthly basis to be used for unexpected medical expenses or in-home care.

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“It’s beautiful because it can help soften the pressure on your normal everyday expenses,” Halaby said. “You may have $5,000 a month in retirement income and be living fine, but all those $5,000 have a home– they’re going to pay your bills of some sort, entertainment, insurance, etc. However, now add on top to that these outrageous deductibles… These are dollars that you and I may not have planned for.”

Certain policies with expiry periods can even be converted into permanent policies with living benefits when they near the end of their term, according to Jeff Girard, Halaby’s co-host.

“It’s not going to be the same maybe easy payment that you had each and every month for the last 19 or 20 years,” he said, “but if you have a need to fill, this could be the lowest cost way to maintain that benefit.”

Halaby and Girard emphasized that not all policies offer living benefits or provisions for conversion, making it vital to look into your current life insurance policy as soon as possible and find out.

“This could be the difference between something you threw away that had tons of value to you, potentially,” Girard said. “If you take a look at it now and you have some lead time between now and your retirement, now and maybe when you think you might get sick or you might need it — let’s call it late 60s, 70s, 80s — there may be a chance to step into this thing, into a policy or concept like this where it’s not going to cost you an arm and a leg.”

Total Financial Solutions offers assistance with preparing for retirement and financial planning in Santa Clarita and the surrounding valleys. Santa Clarita financial advisor Arif M. Halaby, a Certified Estate Planner, and Total Financial Solutions staff work with people of all ages, helping them protect, grow and preserve their assets through an individualized approach. Halaby is also the host of “Total Financial Solutions Safer Money Hour” on KHTS AM-1220. Launched in 2004, the show offers listeners from Santa Clarita financial planning tips and guidance for dealing with today’s ever-changing financial needs.  

Total Financial Solutions, Inc.

24322 Main Street

Newhall, CA 91321

661-753-9683

800-990-7344