Life Insurance Retirement Plans (LIRP): A Supplemental Retirement Strategy

Some financial strategies use permanent life insurance as part of a broader retirement plan.

This approach is sometimes called a Life Insurance Retirement Plan (LIRP).

The concept is simple.

Over time, contributions build cash value inside the policy.

Later in life, that value may be accessed through loans or withdrawals to create supplemental retirement income.

Example

If someone contributes $12,000 per year for 20 years, the policy may accumulate significant cash value depending on performance and structure.

Later, that value may be accessed to generate tax-efficient retirement income under current tax rules.

This strategy is often used alongside other retirement accounts, not as a replacement for them.

The goal is to create additional flexibility and tax diversification during retirement.

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— Sahil Virani