Life Insurance Retirement Plan (LIRP)

Life Insurance Retirement Plan (LIRP)

A life insurance retirement plan, also known as a LIRP, is a type of permanent life insurance policy that is designed to provide both death benefit protection and tax-advantaged savings for retirement. LIRPs typically have a cash value component that accumulates over time and can be accessed by the policy holder while they are alive.


LIRPs are often used as an alternative to traditional retirement savings vehicles, such as 401(k) plans or individual retirement accounts (IRAs). They can provide a number of benefits, including:


  • Tax-deferred growth: The cash value of a LIRP grows on a tax-deferred basis, which means that the policy holder does not have to pay taxes on the growth of the cash value until it is withdrawn.

  • Potential tax-free withdrawals: Depending on the specific terms of the policy, the policy holder may be able to make tax-free withdrawals from the cash value of the policy during retirement.

  • Potential for higher returns: Some LIRPs offer the potential for higher returns on the cash value than traditional retirement savings vehicles, depending on the performance of the policy and the specific terms of the policy.

  • Death benefit protection: Like other types of permanent life insurance, LIRPs provide a death benefit that can be used to cover expenses such as estate taxes and funeral costs, and to provide financial support for the policy holder's loved ones.

It is important to carefully consider the benefits and limitations of a LIRP and to understand the costs and exclusions associated with the policy.

Here are the top ten benefits of a life insurance retirement plan (LIRP):


  1. Tax-deferred growth: The cash value of a LIRP grows on a tax-deferred basis, which means that the policy holder does not have to pay taxes on the growth of the cash value until it is withdrawn.

  2. Potential tax-free withdrawals: Depending on the specific terms of the policy, the policy holder may be able to make tax-free withdrawals from the cash value of the policy during retirement.

  3. Potential for higher returns: Some LIRPs offer the potential for higher returns on the cash value than traditional retirement savings vehicles, depending on the performance of the policy and the specific terms of the policy.

  4. Death benefit protection: Like other types of permanent life insurance, LIRPs provide a death benefit that can be used to cover expenses such as estate taxes and funeral costs, and to provide financial support for the policy holder's loved ones.

  5. Flexibility: LIRPs generally offer a degree of flexibility, allowing the policy holder to adjust the death benefit, premiums, and cash value components of the policy.

  6. Lifelong coverage: LIRPs provide coverage for the policy holder's entire life, as long as the premiums are paid.

  7. Potential for long-term care benefits: Some LIRPs offer the option to add a long-term care rider, which can provide benefits to help cover the cost of long-term care expenses.

  8. Potential to supplement retirement income: The cash value of a LIRP can be used to supplement the policy holder's retirement income, providing an additional source of financial security in retirement.

  9. Potential to pay off debt: The death benefit of a LIRP can be used to pay off debts, such as a mortgage or credit card balances, which can provide financial stability for the policy holder's family.

  10. Estate planning: A LIRP can be an important tool for estate planning, as the death benefit can be used to cover expenses such as estate taxes and funeral costs, and to provide financial support for the policy holder's loved ones.

It is important to carefully consider the benefits and limitations of a LIRP and to understand the costs and exclusions associated with the policy.

Who Should Consider Buying Life Insurance Retirement Plan (LIRP) 


There are several types of individuals who may want to consider buying a LIRP, including:


  • Individuals who want tax-deferred growth: The cash value of a LIRP grows on a tax-deferred basis, which means that the policy holder does not have to pay taxes on the growth of the cash value until it is withdrawn. This can be a good option for individuals who want to maximize the growth of their retirement savings and minimize their tax liability.

  • Individuals who want the potential for tax-free withdrawals: Depending on the specific terms of the policy, the policy holder may be able to make tax-free withdrawals from the cash value of the policy during retirement. This can be a good option for individuals who want to minimize their tax liability in retirement.

  • Individuals who want the potential for higher returns: Some LIRPs offer the potential for higher returns on the cash value than traditional retirement savings vehicles, depending on the performance of the policy and the specific terms of the policy. This can be a good option for individuals who want to maximize the growth of their retirement savings.

  • Individuals who want death benefit protection: Like other types of permanent life insurance, LIRPs provide a death benefit that can be used to cover expenses such as estate taxes and funeral costs, and to provide financial support for the policy holder's loved ones. This can be a good option for individuals who want to ensure that their loved ones are financially protected in the event of their death.

  • Individuals who want flexibility: LIRPs generally offer a degree of flexibility, allowing the policy holder to adjust the death benefit, premiums, and cash value components of the policy. This can be a good option for individuals who want the ability to adjust their coverage and savings over time to meet their changing needs.

Deepak Sharma

Deepak Sharma

Insurance Advisor / WealthGuard


  • My goal is simple, protect what is important to you. I focus my energy on discovering your exposure to risk and building a comprehensive plan to protect you against those risk.