How a Life Insurance Policy Can Be Helpful for Retirement – Darcy Bergen

Darcy Bergen

April 9, 2020

Darcy Bergen of Bergen Financial

Darcy Bergen is the owner of Bergen Financial Group and has experience working with clients who have various financial concerns. He has over 20 years of experience as a financial planner helping his clients plan for retirement and other financial needs. While some individuals might not have substantial savings for retirement, they do have a permanent life insurance policy. Darcy Bergen shares how a permanent life insurance plan can help financially during retirement.

Advantage of Borrowing Money from Life Insurance Policy

Darcy Bergen explains that the purpose of a life insurance policy is for death benefit protection. An additional benefit of a permanent life insurance policy is the potential to borrow money from the cash value of the policy. If an unexpected expense happens, policy owners can borrow money from what they have contributed, according to Darcy Bergen. The principle is they’re basically borrowing money from their death benefit. They’re not required to pay it back, but any unpaid balance will accumulate interest, and it will be deducted from their death benefit.

Darcy Bergen Discusses Why A Life Insurance Policy Can Help With Retirement Income

With most permanent life insurance plans, policyholders can withdraw the cash value and use it as income during retirement. If a policyholder purchased permanent life insurance early in life, they could accumulate significant cash value by the time they retire. They would have a choice to use the cash value to help supplemental income. Darcy Bergen explains the amount of money policyholders can withdraw must not exceed what they have paid in premiums.

Life Insurance Can Have Cash Value

There are two basic types of life insurance, term and permanent. Term life insurance doesn’t have cash value, and it usually ends after the 20 or 30-year term is up, permanent insurance doesn’t expire. When people obtain permanent life insurance, a portion of their premiums has potential to accrue cash value, according to Bergen. A portion of the monthly payment will go towards insurance and maintenance costs, and the rest can accumulate a cash value that can be used later on in life.

Option to Pay Premium with Money Accumulated

During retirement, added monthly costs could be a concern, especially those that are on a fixed income. Darcy Bergen explains policyholders can pay for their monthly payment using their accumulated cash value if they ever have issues paying for their premiums. Using their premium to make the monthly payments will allow them to keep their death benefit without defaulting on the policy. Once they’re in a better financial state, they can go back to making the payments.

Before making decisions when it comes to planning for retirement, Darcy Bergen recommends everyone to meet with a financial advisor. For more of Darcy Bergen’s financial tips on retirement, check out