How to Get the Most Out of Your Retirement Travels

How to Get the Most Out of Your Retirement Travels

Retiring can be both terrifying and exciting. It’s often an emotional time as we hand over our company badge and work phone because it truly feels like the end of an era. Many of us measure our self-worth through our work because it’s our way of contributing to society. So, when it all ends, we can be at a loss as to what to do with ourselves. That’s why many people choose to finally spend time exploring different countries and getting to know the many cultures out there. If you’re worried about your finances though then why not see what your universal life insurance policy can do for you? You might be able to receive your cash surrender value or perhaps more depending on your situation and your policy's cash value.  

Leverage your Life Insurance Policy and Get your Cash Surrender Value or More 

Let’s first review how you can generate income from your value of life insurance policy, as detailed below: 

  • Withdraw from your cash value 
  • Borrow against your cash value or death benefit
  • Choose a life settlement 

Withdraw from your Cash Value 

There are different types of life insurance but if you have a whole life insurance policy then you’ll have what’s known as a cash value that’s been building up over time from your premium payments. This will be worth a certain amount depending on how long you’ve had your policy for. Either way, you can actually withdraw money from that pool without being taxed. Anything above, including interest, will be taxed though. Therefore, make sure you plan your approach carefully with your insurance company advisor. 

It’s worth noting that many life insurance companies also pay out dividends on your cash value. You might therefore have an option to cash those out if you haven’t already. How that works and how much you can get will depend on the details of your life insurance policy. 

Borrow against your Cash Value or Death Benefit

Another great advantage of having a whole life insurance policy is that you can borrow whilst using it as collateral. Your future lender will be able to provide the details of how much you can borrow. It’s worth noting though that you should take care to pay the loan back, including any interest, within the stated time frame. If not, you risk adversely impacting the final death benefit payout. 

Choose a Life Settlement 

Last but not least, if you feel that a death benefit payout is no longer important then you can sell your life insurance policy. This is referred to as a life settlement. For this option, you can generally expect to receive more than your cash surrender value, although less than the death benefit payout. Essentially, life settlement companies are very happy to buy permanent life insurance policies. That's because they receive the final death benefit payout which is still worth more than what they’re willing to pay you. 

It’s worth noting that you can also surrender value of your life insurance policy which basically means that you cancel it and stop paying the premium payments. Depending on how long you’ve had it for and how much it’s worth then you’ll receive the cash surrender value. This option is usually less appealing than choosing a life settlement though because the cash surrender value is basically the very minimum you can receive. On the other hand, a life settlement company will pay you more than you surrender value cash. In return, they get the privilege of receiving your death benefit. 

It's worth noting at this stage that you can also surrender your life insurance. In that case, you're essentially canceling the policy in return for the cash surrender value. It's a quick and easy way to access the cash value of your policy. Although, it's also the minimum payout you can expect to receive.

Getting the most of your Retirement Travels 

Now that you know a bit more about how to generate some income from your life insurance policy, what are you going to do with it? Retiring doesn’t have to be a depressing phase in our lives. On the contrary, it’s a time when we know who we are and what we like. Furthermore, we have time to explore the world. So, why not have some fun? Moreover, here are a few tips to get you started: 

  • Check your health status 
  • Manage your budget  
  • Monitor your pace and plan ahead  

Check your Health Status 

Clearly, no one wants to get caught up in hospitals whilst traveling abroad. That's especially the case in a country where you don’t speak the language. Having said that, you should be able to arrange global travel insurance with most insurers.

Manage your Budget

Budgeting is always an important part of life if you don’t want to stress about money. Even if you have your cash surrender value or hopefully more than that, you’ll still need to make sure it lasts for some time. A great way for your cash surrender money to last longer is to travel through cheaper countries. Alternatively, you can downsize your possessions and even travel around in a camper van to avoid hotel costs. Of course, you have to first check-in with yourself in terms of what type of lifestyle you’re looking for and which home comforts you can’t sacrifice. 

Monitor your pace and plan ahead  

As retirees, we’re older and generally, things need to happen more slowly. There’s nothing wrong with that and in fact, you’ll appreciate more of what’s going on around you. So, take your time, pace yourself and enjoy each new experience. This will also allow you to plan ahead and take time researching various discounts as you travel around. Another great tip is to avoid peak hours and always travel during the quieter and cheaper hours when no one else is around. That way, you'll be able to happily maximize the surrender value of your life insurance policy regardless of how you accessed the value.

Maximize your Cash Surrender Value and Enjoy your Retirement Travels 

First, make sure you’re getting as much of your accessible cash as possible. That doesn’t just mean leveraging your pension income but also maximizing your life insurance policy and any value cash surrender. Remember that you can either withdraw or borrow funds from your policy. Alternatively, you can simply get a life settlement and receive a value higher than your cash surrender value. Either way, once you know your available funds, budget your retirement travels, look for the discounts and downsize where possible. After all, life is about enjoying the various experiences. There’s no better way to do that than to see the world free of material burdens.