Is Life Insurance Valuable? (& Tax Implications of Converting Retirement Plans)

 Life insurance can feel like a tricky subject to navigate. Do you need it? How much coverage should you look for? What about long-term care insurance? 

In today’s episode, after answering a question sent in about Roth conversions in a retirement plan, we are diving into life insurance. Phil and Kendall are sharing some common misconceptions, key ways life insurance has changed over the years, and what you should consider as you’re selecting your own plan. 

We hope this episode is a support to you! 


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Key Takeaways: 

1)It’s usually not the goal to be “customer of the month” at the IRS. Like we said in ouranswer to Paul’s question today, it’s important to remember that converting our IRAs or 401(k)plans to Roth options is a taxable event. Everyone’s situation is different, and there are quite afew variables to consider when determining if it makes sense to have all those taxes pulled atonce or through regular conversions over time.

2)Life insurance is a wise investment, and it’s important to make sure you have enough.$200,000 may sound like a lot when you are looking at options, but that doesn’t stretch as far asyou’d think it would.

3)Life insurance can have benefits while we’re alive. There are life insurance options thatcan kick out tax-free income, can leave tax-free benefits to our heirs, or can support us in long-term care expenses. 


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Please remember that converting an employer plan account to a Roth IRA is a taxable event. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified tax or legal professional for guidance before making any purchasing decisions. Any and all other services related to insurance are an outside business activity and are not offered through or supervised by AE Wealth Management, LLC. Life insurance policies are contracts between the client and an insurance company. Life insurance product guarantees rely on the financial strength and claims-paying ability of the issuing insurer. Life insurance policies are not FDIC Insured. for informational purposes only and are not a solicitation to buy or sell any of the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. 210 Financial is an independent financial services firm that utilizes a variety of investment and insurance products. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). 

AEWM and 210 Financial are not affiliated companies. 1317952-05/22 

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