Financial professionals

Permanent life insurance has similar benefits to a Roth IRA … and that’s just a start

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You may have heard of a Roth IRA as a good option for retirement planning. Its favorable tax treatment allows after-tax contributions, tax-deferred growth, and tax-free distributions at retirement. The drawback? A Roth IRA is not available for everyone and has limits to how much you can contribute.

But another vehicle that may be able to provide you with features similar to a Roth IRA – along with other benefits – is permanent life insurance. Take a closer look at how permanent life can differ from a Roth IRA:


Life insurance doesn’t have income limitations like a Roth IRA. The income limit for a Roth IRA is subject to change annually.


Roth IRAs also carry annual contribution limits which are also subject to change annually and can vary by the age of the plan participant. But life insurance policies can be structured to accept much more in premium dollars than a Roth IRA contribution limit. This can be helpful if you’re trying to catch up and build savings before you retire.


Roth IRA contributions may be subject to market risk depending on the investment options you selected. If the markets are down, your Roth IRA values could go down, too. You can own permanent life insurance policies that never decrease in value and are not subject to market volatility.


There are restrictions on when and how you can get earnings out of a Roth IRA. With life insurance cash value, you can access your available policy values when you need them, without penalty.

Next steps

This is just the start! Whether paired with or as an alternative to a Roth IRA, permanent life insurance can help provide protection, flexibility, and potential for your retirement. Talk to your financial professional to see if permanent life insurance should be part of your overall financial strategy.

The purchase of a permanent life insurance policy is a long-term commitment and is subject to underwriting approval. Life insurance policies contain exclusions, limitations, reduction of benefits and terms under which the policy may be continued in force or discontinued. For complete details of coverage, contact the company for additional information. Before purchasing any permanent life insurance policy, you should request a policy illustration and carefully compare both the guaranteed and non-guaranteed elements.  

Life insurance cash values grow without being subject to current taxation. Cash values can be accessed by way of policy loans without being subject to taxation. However, if tax-free loans are taken and the policy lapses, a taxable event may occur. Withdrawals (partial surrenders) and loans from life insurance policies classified as modified endowment contracts may be subject to tax at the time the withdrawal or loan is taken and, if taken prior to age 59½, a 10% federal tax penalty may apply. Withdrawals and loans reduce the death benefit and cash surrender value. Always consult with a tax advisor regarding your particular situation.

Products are issued by and guarantees based on the claims-paying ability of the AuguStar Life Insurance Company and AuguStar Life Assurance Corporation. Product, product features and rider availability vary by state. Issuer not licensed to conduct business in NY.

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