What is an Insured Retirement Plan?

While multiple strategies exist, an Insured Retirement Plan (IRP) offers an opportunity for a life insurance policy to be the security upon which a loan is collateralized. An IRP allows individuals to fund a permanent life insurance policy over its base premium. At retirement, an annual line of credit is established against the policy where the maximum loan percentage is linked to the type of investment within the policy. For instance, if it’s a universal life policy primarily invested in equities, the maximum loan is typically limited to 50% of the cash value. If it’s a fixed income policy, the percentage can increase to 90%. The primary benefit of this strategy is that the earnings on the money placed within an insurance plan and a loan provided from it are both considered non-taxable.

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          945+ Reviews

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          Maria Marlin Retired Govt Officer, ON, Canada

          Very helpful fully explaining the different plans. Cash value is accessed via policy loans, which accrue interest and reduce cash value our valuable items.

          Client Logo
          Maria Marlin Retired Govt Officer, ON, Canada

          Very helpful fully explaining the different plans. Cash value is accessed via policy loans, which accrue interest and reduce cash value our valuable items.