At this stage of life, life insurance becomes an even more powerful tool for supplementing your retirement income, sustaining your loved ones, paying debts and magnifying charitable giving.

Term contracts can become prohibitively expensive as you age and are generally not available to those over 75. While a term life insurance contract that offers low premiums and a death benefit probably fit your needs in the past, permanent life insurance now may be a better choice.

Permanent life insurance is designed to provide you with long-term coverage, plus the benefit of cash value. Permanent life insurance can be either traditional (such as whole life) or flexible (such as universal life or variable universal life). Traditional life may be a good choice if you like a guaranteed level premium and guaranteed results.

As long as premiums are paid, it offers:

• guaranteed death benefit
• guaranteed level premiums
• guaranteed cash value

Flexible permanent life insurance offers the ability to change your death benefit and premiums to accommodate changes in your life—while accumulating value with tax-deferred growth for the future.

"If you know you’re going to have the need going forward, the earlier you can purchase permanent life insurance the better," says Julie Halgren, senior risk products specialist at Thrivent Financial for Lutherans.

Here are four ways permanent life insurance can help you.

1. Income Replacement
Your retirement income is probably coming from several sources, such as a defined benefit pension plan, Social Security benefits and personal savings. However, if you die before your spouse, inflation, taxes and uncovered medical or other expenses can reduce the power of these resources.

"A lot of people don’t realize that the pension income may go away and that the spouse is only allowed to keep the greater of the two individuals’ Social Security payments," Halgren says. “Also, expenses could actually increase when you factor in single tax-filing status, home health care costs, home maintenance needs, etc.

Life insurance death benefits can help ensure that the surviving spouse has the financial resources needed for the remaining retirement years.

2. Supplemental Retirement Income
A life insurance contract, possibly funded by the repositioning of taxable assets, can ensure a steady flow of dollars to supplement your or your spouse’s income in the event of a premature death.

If you both are fortunate enough to life up to or over your life expectancies, life insurance can give you control over the amount of taxes you pay during retirement. In addition, the potential to receive income that is not taxable is available through partial surrenders (up to the basis in the contract), or by taking out loans+ (only on contracts which are not considered modified endowments).

3. Estate Preservation
Depending on estate size and tax rules at the time of your death, you may be able to pass life proceeds from a cash-value life insurance contract to your heirs without incurring any estate tax.

If estate taxes are likely, a Thrivent Financial representative may help you set up an irrevocable life insurance trust to pay the tax. "The trust takes the life insurance contract out of your estate," Halgren explains.

Creating a legacy is a long-term commitment and your estate could continue to grow in retirement. The result can be an increasing income tax liability (especially for tax-deferred growth) or an estate tax liability to your heirs.

As your estate grows, life insurance can be an excellent tool for managing increasing income and estate tax liabilities. It also may be used to replace a portion of your estate that could be lost due to taxes.

“If you don’t make provisions for the future, you could miss out on the opportunity to provide for the people you care most about,” says Halgren. Whatever the size of your estate, a Thrivent Financial representative will work with you to create a well-designed course of action to help ensure the decisions you make are carried out.

4. Legacy Extension
If the welfare of your spouse and children is secure, consider changing your contract’s beneficiary to the charitable organization of your choice. In addition, there may be tax advantages to creating a gift of charitable life insurance. Thrivent Financial for Lutherans and its respective associates and employees cannot provide legal, tax or accounting advice or services.

Work with your team of professionals, including your Thrivent Financial representative, your attorney or tax professional to implement the appropriate option.

+DISCLAIMER: Loans and withdrawals will decrease your death benefit and cash value. Surrenders may generate an income tax liability and may be subject to a surrender charge. A significant taxable event can occur if a contract with an outstanding loan lapses or is surrendered. Loaned values may be credited at a lower rate than unloaned values.