The Finance Of Longevity

Worried About Market Volatility in Retirement? Consider Whole Life Insurance

Cash value can help protect against risk from market downturns

June 28, 2019 — INDIANAPOLIS–(BUSINESS WIRE)–Not having enough assets to generate income in retirement or losing assets because of market downturns are common concerns of those preparing for retirement, but whole life insurance as part of a solid retirement strategy can do more to alleviate those issues than many people might think, a recent report shows.

A new report, Integrating Whole Life Insurance into a Retirement Income Plan: Emphasis on Cash Value as a Volatility Buffer Asset, by Wade D. Pfau, Ph.D., CFA, and Michael Finke, Ph.D., CFP, considers several asset scenarios of people preparing for retirement. In each case, scenarios including cash value of life insurance policies result in more income for retirees down the road than scenarios that don’t include whole life insurance.

“This report shows that using insurance with other investments can really lay the foundation for better outcomes in retirement,” said Pfau, professor of retirement income at The American College of Financial Services in Bryn Mawr, Penn. “We often hear that we don’t need life insurance in retirement because we have investments, but this research shows it’s harder for the market to beat a strategy with both life insurance and investments.”

Volatility Buffer

One scenario in which life insurance can pave the way for a greater income during retirement than investments alone is by using the cash value of life insurance as a source of income in years with market downturns. This “volatility buffer” scenario uses a policy’s cash value to draw as income in the year following a market downturn, rather than deplete retirement assets faster than expected because of lower-than-anticipated investment returns.

“Most people know that whole life insurance can protect a legacy and provides for those left behind when someone dies,” said Chris Coudret, vice president, strategy and business development, OneAmerica®. “But we also know that people find peace of mind in the guaranteed cash value that whole life, or permanent, insurance can provide. This report demonstrates that cash value can also help mitigate inherent market risks in an investment-based retirement strategy.”

using insurance with other investments can really lay the foundation for better outcomes in retirement...

An advantage of life insurance as part of a retirement strategy is that it provides guarantees that market-based investments can’t, said the report’s co-author.

“I prefer to incorporate life insurance cash value into an overall investment portfolio as part of a retiree’s bond allocation,” said Finke, dean and chief academic officer at The American College of Financial Services, which has helped financial services professionals realize their career goals through rigorous and practical education since 1927. “One important advantage of cash value over a traditional bond mutual fund portfolio is the protection against a decline in value if interest rates rise.”





To learn more about whole life and annuity products and to be connected with a financial professional, visit Financial professionals can obtain the full report by contacting Tammy Lieber at
About OneAmerica®


A national provider of insurance and financial services for more than 140 years, the companies of OneAmerica help customers build and protect their financial futures. OneAmerica offers a variety of products and services to serve the financial needs of their policyholders and customers. These products include retirement plan products and recordkeeping services, individual life insurance, annuities, asset-based long-term care solutions and employee benefit plan products. Products are issued and underwritten by the companies of OneAmerica and distributed through a nationwide network of employees, agents, brokers and other sources who are committed to providing value to our customers. To learn more about our products, services and the companies of OneAmerica, visit
OneAmerica® is the marketing name for the companies of OneAmerica.
Life insurance should be purchased by individuals that have a need to provide a death benefit to protect others with insurable interests in their lives against financial loss. Life insurance is not a retirement plan, investment, or savings account.
Withdrawals and loans from a life insurance policy reduce the death benefit and cash value, may increase the chance the policy will lapse, and may result in a tax liability if the policy terminates before the death of the insured.
Guarantees are subject to the claims paying ability of the issuing insurance company.