In this Episode of the Secure Your Retirement Podcast, Radon and Murs discuss how modern life insurance can be more than a death benefit—it can be an all-in-one tool for retirement planning strategies, tax advantages of life insurance, and long-term care insurance. With guest expert Jim Bowman, they explain how well-structured cash value policies—especially Indexed Universal Life—can provide tax free retirement income, flexible access to cash, and an efficient way to leave a legacy to family or charity.

Listen in to learn about the practical differences between term and cash value policies, how to design funding to avoid MEC rules, why many retirees use unneeded RMDs to create tax-efficient benefits, and how hybrid life insurance can accelerate a portion of the death benefit for qualifying long-term care needs. If you want a clear path to secure your retirement, plan for retirement, and keep a simple retirement checklist for retiring comfortably, this conversation is for you.

In this episode, find out:

·     How to think about life insurance benefits beyond debt protection—legacy, liquidity, and LTC.

·     The mechanics of life insurance cash value and using policy loans for tax free retirement income.

·     Why life insurance and taxes can work in your favor when policies are designed to minimize insurance cost and maximize accumulation.

·     When to consider life insurance for retirement (including for business owners) and how to fund over 5–7 years to avoid MECs.

·     Using unwanted RMDs to fund life insurance for seniors or a hybrid life insurance policy with long term care insurance riders.

Tweetable Quotes:

·     “Life insurance can be the Swiss Army knife of retirement—growth, tax efficiency, legacy, and long-term care in one plan.” — Radon Stancil

·     “Design the policy to minimize insurance cost and maximize cash value—then let it do the heavy lifting for tax-free income.” — Murs Tariq

Throughout the episode, we cover: Retirement Planning, retirement planning strategies, planning retirement with Indexed Universal Life, coordinating with a broader financial plan, and using a straightforward retirement checklist to align cash flow, taxes, and legacy goals—so you can secure your retirement.

Resources:

If you are in or nearing retirement and you want to gain clarity on what questions you should be asking, learn what the biggest retirement myths are, and identify what you can do to achieve peace of mind for your retirement, get started today by requesting our complimentary video course, Four Steps to Secure Your Retirement!

To access the course, simply visit POMWealth.net/podcast.

Here is the full transcript:

Welcome everyone to Secure Your Retirement podcast. We are super excited today. 

Murs and I, we work sometimes to try to get individuals that can come on and talk 

to us as well as talk to our clients. And today we got a very special guest, Jim 

Bowman, who is someone that we partner with and have known for a long time. And he 

really helps us and be ready, I guess you might say, for helping our clients with 

a very unique type of investment. I say it’s unique because a lot of people don’t 

think about it as an investment, but with life insurance and he’s a true life 

insurance specialist. So, Jim, first of all, I just want to say thank you very much 

for coming on the show. Well, thank you for having me. I’m honored to be here with 

both of you. I’ve enjoyed our company and our conversations over the years about how 

you help your clients. And so, asking me to be a part of the show, it’s an honor. 

So, thank you very much for having me. Excellent. So, here’s kind of the reason why 

we wanted you on. We know as being in the world we’re in, we work with individuals 

that are, you know, most of the time, 55 years of age and older. And so, we help 

them in a lot of different ways. But one of the things that we talk to our 

clients and prospective clients about from time to time is life insurance. Now, a 

lot of times when I bring that topic up, Jim, what happens is I say, “Hey, let’s 

talk a little bit maybe about life insurance.” And the first thing somebody says to 

me is, “Wait a minute, Raiden, I got the house paid off. “The kids are raised. “I 

got money in my 401k, I got money in my IRA. “I’ve got a brokerage account. We’re 

set. Why would I have life insurance? Because in my mind, life insurance is what I 

do to protect those debts, and now here you’re talking to me about life insurance. 

So how would you help our listeners think about why would we even bring it up? 

It’s a great question, and I think that’s normal for your clients to think that, 

right? Because they’ve always looked at life insurance as an expense. They don’t look 

at the value it brings to them and their families. So, a couple of things. The 

first is when your clients talk about a 401(k), for example, 401(k) really is just 

a section of the internal revenue code. It says that, hey, you can put away money, 

tax deferred, let it grow, and then you pull it out, and then you pay taxes on 

it. It’s not a marketing name. That’s the internal revenue code, 401(k),  

But now, for life insurance, there’s another section of the code, section 72. And 

what that says is, “Hey, you can put away money after tax. It can grow, 

and then you can borrow your money and never pay any income taxes or capital gains 

on that.” So, it’s a unique thing. The life insurance industry doesn’t like that we 

say that you say it’s an investment, but it can be a great enhancement to your 

portfolio. So that’s number one. The second thing is people, I’ll just say this, 

people buy life insurance for one of two reasons and one of two reasons only in my 

career. They love somebody more than they love themselves. So, they want them to have 

a quality of life after they’re gone, whether it’s leaving an income for a spouse 

or for the next generation, you want them to have a better start to life than what 

you had. And that’s a great way to legacy plan. And the most recently, the last 

10, 15 years, long -term care. There are so many advantages to having life insurance 

with long -term care riders, or even annuities with long -term care riders. So that’s 

really become great in the planning process for your clients. So, I think over 55, 

everybody should be considering life insurance in their financial plan. – Yeah, that’s 

a great point, Jim, and you know, I think a lot of people when they think about 

life insurance, going back to what Radon said and what you just said is it’s a 

nice way to legacy plan. I want to leave some money behind and the biggest benefit 

I think is that it’s tax -free to that next generation, right? So legacy planning is 

huge for a lot of different reasons for people and let’s just leave it at that and 

say, you know, one strategy is legacy planning and when I pass away, I need to take 

care of my spouse. I need to take care of my kids. I want to create this multi 

-generational wealth. And so, say you have someone that doesn’t have that desire and 

they really want to be focused on retirement planning. And you just said it, right? 

You can grow. You can look at this as an investment vehicle. So, help our listeners 

kind of understand, well, what does that really mean? How can life insurance operate 

as an investment vehicle for retirement planning tools? Great question. So, like I’m 

going to explain it through a story. Okay. And I’m just going to assume, let’s say 

hire a contractor, then we’ve got to build by the materials, 

everything else. The first two, two and a half years is nothing but expense, because 

we got no revenue, because we got no renters, right? Now let’s say year three, 

we’ve got all five stories built, and we’re starting to bring in some revenue. And 

let’s say we get 20, 25 % occupancy, okay? Our expenses are down, but now we’ve got 

some revenue coming in. And let’s say by year five, we’re at like 85, 89, 

90 % occupancy. That’s all revenue. Now, our major expenses are all gone, 

but we do have ongoing maintenance expense for utilities, for the grounds, for taxes. 

So, our expenses are down significantly, but we have an ongoing charge. That’s exactly 

how life insurance works. You have a lot of upfront expenses to cover the cost of 

the underwriting, commissions paid, all in that first couple of years. 

And then after that, when you have gains, there’s very minimal expense. So long 

term, this is an unbelievable asset to own. It’s unbelievable and it’s a low cost 

if you own it and do it for the right reasons. And if you have it 20, 30 years, 

it’s going to be less than a percentage point of overall cost. 

And you get all the tax benefits of being able this money to grow tax deferred and 

you get to pull it out tax -free. There’s no other asset class that can do that, 

none. And in addition, you’ll get a legacy play, a death benefit on top of that. 

and depending on the contract you may even get some long -term care benefits. So 

there are some real advantages to using this to supplement or for business owners who 

don’t have a 401k for this to be the retirement plan and we see a ton of people 

who use life insurance in this capacity. So, let’s just back up here for a second 

and kind of baby step our way into this because we kind of we jumped into this 

idea because I think for a lot of listeners, you know, you know, whenever you’re 

younger, you might go to work somewhere, and you get life insurance. And typically, 

if I’ve got a house or I’ve got some debts that I’m trying to cover, I’m going to 

get term insurance. Term insurance is where I’m just buying the insurance and most 

times I’m, you know, they’re never going to get a death benefit. I hope I don’t, 

right? So, when you talk about this idea of like and cash accumulation and all these 

benefits, are you talking about term insurance? – So no, good point. So, the term 

portion is really, I recommend term for those, hey, I’m just starting out, 

I’m just like for my son, we just had our first grandchild, right? So, they need to 

have term insurance, God forbid he passes. So, his wife and the baby can have a 

good start and replace their income, okay? But beyond that need, 

if you have a desire to supplement or build a retirement income plan that’s not 

subject to taxes, there’s no better vehicle. Because to be honest, we don’t know 

what tax rates are going to be in 15, 20 years, especially for your younger 

clients, 30, 40, 50 years from now, what’s the tax rate going to be? Even for your 

clients who are 65 retiring, what’s the tax rate going to be when they’re 80? So, I 

love having a portion of your retirement plan in a vehicle that is not going to be 

subject to income tax or capital gains taxes. So again, I just want to make sure 

that you’re taking everybody along. So basically, what you’re talking about is what I 

guess we would call cash value life insurance, meaning it’s going to have a cash 

value to it. And I know you just did a very nice analogy around the house and the 

expenses and all that kind of stuff. So, let’s just take it through so that I think 

for the client who’s listening, because I’m going to have what’s going to be called 

legally a premium going into this policy, right? So, when I put money in there, 

premium to me sounds like all expense. So can you just kind of help walk through 

like If I said, I want to put X amount of money into this life insurance, how’s 

it going to work so that all of that’s not just going to true premium that I’m 

going to actually have access to some cash? That’s great. And so, I’ll try to break 

it down really simply. So, like, and this is based on the Internal Revenue Code, 

okay? So, term insurance is all expense, okay? And so, and when you want to maximize 

your death benefit you want them you want to pay as little premium as possible. 

Well, what we’re talking about is going to be the exact opposite. What I want to do 

is pay as little money for the cost of insurance and administrative of the policy 

and every dollar above that I want to go into a vehicle that’s going to be able 

to grow whether it’s a product, whether it’s whole life, whether it’s a variable 

life contract, like every dollar above that then goes in and I’ll just use an index 

universal life for example. So, let’s say we’re putting in X dollars, 

X plus one will then go into the index account and whatever that index account gets 

is going to be the return on those dollars in that account and that’s the, investment portion of life insurance. And when we design this, we design this 

to really minimize the amount of life insurance we buy. And this is really telling 

the internal revenue service has a limit on how much you can put in based on age 

and how much insurance you buy, because they understand that this is a pretty cool 

vehicle, and they really want you to do this to supplement retirement this is life 

insurance is really what one of the government’s way of saying hey here’s a way we 

can help you take care of your family and yourself without us being involved from a 

tax perspective or having to write checks from the government so does that help that 

helps a lot yeah so let’s take for example Jim like a I don’t know a small 

business owner he’s got excess cash every single year and he’s listening to this 

right now, and he goes I really like this idea of building, it’s kind of the Swiss 

Army knife of, hey, if something happens to me, there’s, there’s tax -free money to 

my spouse, right? 

I retire, I’ve got this growth vehicle now, this investment vehicle, through life 

insurance, I can utilize for tax -free benefits down the road. And then we’ll, we’ll 

get to long -term care as well. So, it can do a bunch of different things for me. 

I want to go fund this. Is this a forever type of funding situation or in your 

opinion or your experience, what’s the most effective way to kind of set these plans 

up and to get that cash value rolling for you? So, for a business owner, 

we try to mirror that with what their game plan is. Is this, are you going to be 

in business for 10 years or 15? We want to try to mirror that work path life with 

how much they want to fund. For some of your other clients who maybe are, you 

know, 55, 60, 50, it’s like, hey, we’re only going to work like the next five, 

seven years. All right, we will do that and put it in over a five -year or a 

seven -year period. And again, the Internal Revenue Service has rules on this. 

Like we can’t put it all in one year and have it be a true investment and not be 

taxable. They’re going to say, it’s called a modified endowment contract. And so 

we want to avoid that so we can get the most tax advantage thing. But it really 

comes down to a conversation with you and your clients is, what’s the goal here? 

And how long do we have this money coming in? All right, we want a portion of it 

to go here. And I’ll say this, and you guys are great planners. You know, we don’t 

want all of our eggs in one basket. This is part of an overall strategy because 

this is structured properly is not a high -risk deal. You may want other 

opportunities to take on some risk or try to get more, more in return. That’s 

taxable. This is, as I say, I love to have a tax -free bucket as part of my 

portfolio. Yeah, because I think one of the maybe misconceptions or however, 

you want to shape it is; I don’t want life insurance because it’s a cost, right? 

Term life insurance truly is a cost, and do I want to pay that for 20 years or 

the 10 -year term that I’m buying with no true benefit to it if I stay alive, 

right? I lived, but I didn’t get the use of the life insurance that I paid for 

it. But with cash value life insurance, kind of the way that you just structured it 

is, Well, it’s a three -year, a five -year, a seven -year, a ten -year commitment, and 

it’s not all cost. And then you get this train rolling, and a lot of times you 

hear people say, “I’ve got this policy that’s paid up,” right? Can you explain what 

that means? So, it’s a term that’s probably very easy to misunderstand because it’s 

not used the same by everybody. But paid up technically means you have no more 

premium payments do on the contract and it’s going to endow meaning how much you 

bought for death benefit will be available at a specific age and that’s more like a 

whole life term and there’s great whole life contracts I’m not one of those people 

like I only like one type of permanent I kind of like what fits the client’s 

strategy methodology philosophically Pays it up means you definitely don’t have any 

more premiums that are due. OK. Yeah. And so, I tell you what, 

just so we can make sure we get this into our conversation today, because we kind 

of talked about it a little bit. So, I’m going to sum up where I think we are on 

this. The idea is, as I could have in my, I call it the cash bucket of the of 

the policy, I could have a substantial amount of cash there that I would have 

access to in the future, tax -free without having to pay any taxes on it. So, I 

could actually create an income stream out of this bucket. Is that right? Absolutely. 

Absolutely correct. And the other thing that you probably go in there, Raiden, so I 

apologize. But the other thing is, you’re 401(k), your qualified plans have rules. 

You can’t touch money until 59 and a half. You have to start taking money at RMDs 

at, I don’t know what age it is now, 72, 73, whatever it is, this cash bucket 

that you talk about has no rules. I can tell you from my own account, 

I had an opportunity to buy into a business and be an investor. Well, I didn’t 

want to liquidate anything else. And so, I went and took a loan from my cash value, 

it’s an index universal life contract, I took a loan from that and the money was 

there and I used that to be partners in this opportunity. 

Now I’m paying myself back, I’ll pay that money back over time, but it was a pool 

of cash I could use and you know, whether you’re 52 or 42 and you want to use it 

at the start of a business, it’s there for you and that’s another real advantage 

that people don’t always think about. It’s the access to the liquidity when you want 

it to. – Yeah, so let’s just transition here just so we can, I want to get this 

topic in because it’s a big topic for us as well when we’re talking to clients. So 

we talked about in the very beginning that you can add to these policies a long 

-term care benefit. And the reason why I like this, and I just want you to kind of 

maybe help our listeners a little bit, is that with the old traditional long-term 

care, we’ve got some clients that have these policies that they’ve had for many 

years, and they had it and now are getting a rate increase after rate increase, and they’re 

going, “Should I still do this?” And that’s the old traditional. And so, with life 

insurance, I can attach to it a long -term care benefit. So can you walk through 

what that looks like and some of the benefits of why somebody would do that for 

their long -term care planning? Yeah, so because, and I will say this, the industry, 

when individual long -term care policies came out, they made some assumptions that 

were wrong, which has generated all these increases because people thought they 

wouldn’t hold these policies forever. Well, why would you not hold on to a long 

-term care policy, an individual contract? So that has really generated a 

lot of the reasons for the rate increases. So, what’s happened is decided with 

the help of the IRS decide that we can go and tap into the death benefit and use 

that prior to somebody dying to pay long -term care medical expenses. So instead of 

so, there won’t be any rate increases because what you’re doing is accelerating what 

you’ve already purchased. Let’s use it’s a million dollars. Okay, I bought a million 

dollar death benefit. I can’t do two to six of the activities of daily living. 

That’s what it takes to trigger being able to access the money. And then you’re 

going to be able to access, depending on the company and the contract, a portion of 

that death benefit over the next four years. And the typical client needs long -term 

care coverage for about four years. And that will all be dispersed to the client or 

to the owner of the contract, tax -free. It is such a simple way to help address 

this huge problem that the country has for long -term care benefits. And I do, 

I want to applaud you guys because it’s probably about a little over a year and a 

half ago when we sat down and talked about, hey, we want to incorporate more and 

you guys have become experts in long -term care. So, I applaud you and what 

you’re doing for your clients. Yeah so, I think it comes back to this this idea of 

like this Swiss Army knife tool that can only help you it can only help you as 

long as you understand the nitty -gritty of right the funding rules and you 

know not overextending yourself by saying I need to go get a $10 million policy 

right there’s that you’re going to be paying premiums into that right so part of this 

is we’re planning and kind of seeing how it fits into the plan itself. And we 

always talk about, you know, take like a, take like a high-income earner that is 

not close to retirement and they say, hey, I’ve maxed out my 401k, you know, like 

I was told to; I built up my emergency fund. I’ve, I’ve funded a taxable brokerage 

type of account and like, what do I do next? Right. Often the next step is, I 

would say put this into like, you know, a different type of strategy, which is, 

well, you could choose to fund life insurance for a retirement vehicle for a long 

-term care planner and then take the retiree that’s no longer making income. Let’s 

talk about this one, because this one, we’ve got plenty of clients today that are 

forced to take that requirement on distribution. They don’t need it one bit. 

How is that strategy utilized? Say I’ve got someone that has a $50,000 RMD, 

requirement of distribution that they don’t need, and they like the idea of long -term 

care, they like the idea of leaving some tax-free money behind. How does that work 

in your world? – So, that’s probably the bulk of what we do is with retirees that 

have money that I’ll call it never money, forever money, they don’t need it. 

How do we put that money to work for them? Well, A, I love the life insurance for 

a legacy play, and we’ll talk a little bit, but I’m buying it for the long-term 

care, because the individual products, as we talked about earlier, aren’t really good 

for clients in my opinion today. So, if I can move taxable dollars, 

because they’re tax -free, you got to pay taxes and then if I can put them in a 

vehicle, they’re never going to get taxed again. That’s a home run. And if it can 

do three things for me, A, it can grow tax deferred, and I can pull it out tax 

free. That’s number one. Two, I can leave a legacy. I’m going to get more out to 

my, to my loved ones or a charity. You can use it for charity and then I can get 

my long -term care coverage. I can have a pool of money set aside for long -term 

care. So, if clients don’t need the money. 

800,000 that I’m never going to use, realize what the tax liability is that over 

their lifetime and you guys know how to show them that and then say okay if we 

move this a Roth or like life insurance will be kind of a Roth on steroids in my 

opinion what are the other value benefits that they could get, and you you guys can 

show that on paper so I would encourage everybody listening here if you’ve got a 

qualified account that you know you’re not going to need, or you know a portion of it 

you don’t need to sit down with MERS and Raiden and take a look at this as an 

option. Yeah well, I tell you I mean we could probably sit here and talk all day 

about this but we felt that this was a beneficial topic and we appreciate you 

taking out time from your schedule to come and help us get a little bit more 

clarity and I do want to just say I know you just set it yourself. But if you 

are listening to the podcast and you’re thinking, man, I just don’t maybe completely 

understand what they’re talking about. It’s very easy. Just go to our website, 

POMwealth.net. Go to the Contact Us page and just say, Hey, I want to have a 

conversation. I want to see how this may fit or not. And we’re glad to show 

anybody how this could potentially work for them. But thank you very much, Jim. We 

appreciate you coming on the show today.