Skip to main content Accessibility help
The blue logo for John Hancock
  • Help center
  1. Help center

For financial professionals

  • Life insurance
  • Investments
  • Retirement
  1. For financial professionals

    • Life insurance
    • Investments
    • Retirement
  • For plan sponsors
  1. For plan sponsors
Sign in or register
  • Home

  • Insure

    Insure

    Protect what matters most.

    Explore insure
    • Term life insurance
    • Employer Solutions
      1. Premier Benefit IUL
    • Hybrid solutions
      1. LifeCare
    • Permanent life insurance
    • Vitality
    • Aspire with Vitality
    Life insurance to help you live a longer, healthier life.
    Talk to an insurance professional
  • Invest

    Invest

    Make your money work harder for you.

    Explore invest
    Personalized advice to help you meet your financial goals.
  • Retire

    Retire

    Something you can look forward to.

    Explore retire
    Enjoy what comes next
  • Insights

  • About us

    About us

    Connecting customers and communities.

    Explore about us
    • Community Investment
    • Diversity, Equity and Inclusion
    • Leadership
    • Newsroom
    • Our Culture
    Let’s build better, together
    View current career opportunities
  • Help center

    Help center

    Resources, FAQs, contact information and more.

    Get started
    • Life insurance
    • Retirement
    • Individual annuities
    • Long-Term Care
    • Investments
    • Group annuities
    • Other resources
    Have questions about a product or service?
    See how to contact us
  • Home
  • Insure
    • Explore insure
    • Term life insurance
    • Employer Solutions
      1. Premier Benefit IUL
    • Hybrid solutions
      1. LifeCare
    • Permanent life insurance
    • Vitality
    • Aspire with Vitality
  • Invest
    • Explore invest
  • Retire
    • Explore retire
  • Insights
  • About us
    • Explore about us
    • Community Investment
    • Diversity, Equity and Inclusion
    • Leadership
    • Newsroom
    • Our Culture
  • Help center
    • Get started
    • Life insurance
    • Retirement
    • Individual annuities
    • Long-Term Care
    • Investments
    • Group annuities
    • Other resources
    • Help center
    1. Help center

    For financial professionals

    • Life insurance
    • Investments
    • Retirement
    1. For financial professionals

      • Life insurance
      • Investments
      • Retirement
    • For plan sponsors
    1. For plan sponsors

Your browser is not supported.

To use our website, we recommend using the latest version of Microsoft Edge, Chrome, or Safari.

How to use life insurance for retirement

Retire
Two young children in pajamas jumping on their parents bed in the early morning

 

It’s understandable if your life insurance policy is not top of mind for you on a daily basis. But did you know that, aside from paying your beneficiaries money upon your death, there are other benefits worth exploring? As you look ahead to retirement, it’s worth exploring how your policy can be utilized as a source of income in retirement to help maintain your lifestyle.

Using Life Insurance to Fund Retirement 

 

Building cash value

One of the benefits of a permanent life policy is the ability to accrue “cash value.” In its simplest form, the cash value within a policy is the balance remaining after a portion of a premium payment is applied to insurance costs. It is this feature that provides a few different uses for life insurance in retirement.

Using life insurance for retirement income

As the Simple Dollar explains, the cash-value account grows over time and can be withdrawn as a source of income in retirement. And provided the amount withdrawn doesn’t exceed the amount you’ve paid in premiums, it’s not subject to taxes either.1

Borrowing from yourself

You can also use life insurance for retirement by borrowing from your cash value. Think of it as a loan you’re getting from your future self. Technically, you’re not required to re-pay it, although it will accrue interest and ultimately, the loan amount will be deducted from the death benefit (i.e., the amount paid out to your family upon your death).  

Paying your policy with your policy

If you’re reassessing your budget items in prepping for retirement, another thing worth noting for permanent life policyholders is the ability to pay upcoming policy premiums with your cash value.

What about term?

How does your term policy fit in to all this talk about cash value? It doesn’t, because there is no cash value in term insurance. But it does bring up another conversation worth having: Do I need life insurance after I retire?2 When your term policy expires, you should consider factors such as your current income, debt, estate plan, and the self-sufficiency of your kids when weighing this important decision.

 

 

 

Want to start your plan for an amazing future?
Start a retirement plan

More on this topic

  • Planning for the new retirement in five steps
  • Investing with an advisor: making the shift from DIY
  • Key ways to stretch your retirement income
  • Crafting a financial plan for retirement: 5 expenses to remember
  • Should you delay retirement?




Citations:


1 The Simple Dollar: “Cash Value and Life Insurance: How to Pull Money Out of Your Policy” by Frank Addessi, June 17, 2020

2 Investopedia: “Do You Need Life Insurance After You Retire?” by Tim Parker, December 3, 2019 https://www.investopedia.com/articles/personal-finance/010716/do-you-need-life-insurance-after-you-retire.asp 

This article is not an endorsement of any particular product, service or organization; nor is it intended to provide financial, tax or legal advice. It is intended to promote awareness and is for educational purposes only. 

Loans and withdrawals will reduce the death benefit and the cash surrender value, and may cause the policy to lapse. Lapse or surrender of a policy with a loan may cause the recognition of taxable income. Withdrawals in excess of the cost basis (premiums paid) will be subject to tax and certain withdrawals within the first 15 years may be subject to recapture tax. Additionally, policies classified as modified endowment contracts may be subject to tax when a loan or withdrawal is made. A federal tax penalty of 10% may also apply if the loan or withdrawal is taken prior to age 59 1/2.

Insurance products are issued by: John Hancock Life Insurance Company (U.S.A.), Boston, MA 02210 (not licensed in New York) and John Hancock Life Insurance Company of New York, Valhalla, NY 10595.


Individual
  • Annuities
  • College savings
  • Group annuities
  • Life insurance
  • Investments
  • Retirement
  • Rollover
  • Safe-access accounts
  • Travel insurance
Financial Professional
  • Annuities
  • College savings
  • Life insurance
  • Investments
  • Retirement
Plan Sponsor
  • Retirement / TPA
  • Retirement / plan sponsors
  • International group program
About Us
  • Community Investment
  • Diversity, Equity and Inclusion
  • Leadership
  • News
  • Our Culture
Quick Links
  • Careers
  • Help center
  • Lost or unclaimed policy form
  • Contact John Hancock
  • Manulife Global
  • Manulife Investments
  • Manulife Real Estate
  • Manulife Re
  • © 2025 John Hancock
  • Stock Price
  • Privacy & Security
  • Fraud Prevention Center
  • Legal
  • Accessibility
  • Do Not Sell or Share My Personal Information