Business Innovators Radio - Interview with Don Hanifin, Founder of DH Retirement Solutions Discussing How Life Insurance Fits into Retirement

Episode Date: June 30, 2025

With 29 years of experience in the financial services industry, Don is the founder and owner of DH Retirement Solutions, Inc. Based in Massachusetts and Connecticut, Don specializes in helping individuals and families navigate retirement income planning with a focus on optimizing income and reducing taxes.Don works with clients to create comprehensive strategies that integrate life insurance, annuities, Medicare, and longevity care allocation planning. By taking a proactive approach, Don helps clients secure their financial future, ensuring they enjoy a comfortable and worry-free retirement.A trusted advisor, Don provides personalized solutions that align with each client’s unique goals and financial situation, all while helping them maximize their retirement savings and minimize tax liabilities.Insurance Licensed in MA & CT | Retirement Income Planning ExpertLearn More: http://dhretirementsolutions.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-don-hanifin-founder-of-dh-retirement-solutions-discussing-how-life-insurance-fits-into-retirement

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of Influential Entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have with this Don Hanofin, who's the founder of D.H. Retirement Solutions, and we'll be talking about how life insurance fits into. retirement. Don, welcome to the program. Thank you, Mike. Appreciate you having me.

Yeah, I'm looking forward to learning about life insurance and retirement because I think that a lot of people think life insurance is just a bill you pay and then when you die, it pays money to your family. So this is a piece of retirement. So I want to learn what you teach your clients. But before we dive into that, give us a little bit of your story and background. And how did you get into the financial services industry? Yeah, so I got into the industry about 30 years ago, Mike, and I started out actually in long-term care, working with GE a long time ago. And it's kind of a safe money approach. I've enjoyed working with starting out in my business with older people. And my focus, I think, starting from that as the genesis in my career in the insurance field, was the things I'm going to concentrate

things that are guaranteed, things that are safe. I enjoy investing. I follow it myself. That's not what my profession is about. I work more toward making sure that whatever you've started in your life, you're able to complete and you are able to age with a quality, with a sense of business and dignity, wherever you choose to do that. You know, I think that's a huge piece that people would listen to that and go, wow, I can just exhale and take a deep breath and say that just gives me peace of mind. I don't want to take those market volatility risks and all of that. So I love safe money and I love guaranteed. Those are just wonderful, powerful words.

So that approach, I'm sure, just really resonates well with your clients. So let's talk a little bit about how does life insurance fit into a retirement plan? Well, you know, most importantly, Mike, your question assumes that you'll make it to retirement. I said a little bit tongue in cheek, but, you know, of course, life insurance plays a significant role in retirement planning, but its foundation is protecting what's important in your life. Maybe you're young, you're a young professional person. You're just starting out. Life insurance is there to protect and basically to complete what you've started.

Like, for instance, maybe you've seen. started a family or a mortgage or education costs, for example. So life insurance guarantees the completion of these long-term responsibilities in the event of your death. You know, life events are leveraged through loans during life to make them affordable. Death events should also be leveraged and to make them affordable so that your life mission is completed if you die prematurely. You know, that's a really big point you bring up there. It makes me think about like, you know, don't just make assumptions. You know, that's assuming you're going to make it a retirement, and that's wonderful.

But you need to have those contingency plans in place. I like that point that you're making. No, thanks, Mike. You know, it's for this reason that when I'm working with clients, especially younger professional people, I first want to understand their life events. what's currently leveraged and what amount of money would be required to complete that life mission? And of course, you know, we're talking right now about term insurance. I don't want to spend a lot of time on it because it really doesn't play a role in retirement,

but it can play a valuable role, a bridge getting you toward that. So term insurance is just pure death coverage. There's really not a lot of moving parts in it, Mike. it offers the most leverage. And that's the reason it's the, I think, the tool of choice for people that have a lot of balls in the air right now. And we find out what those are when we sit down and we work with people. You know, the sad fact is that slightly over half of Americans actually have life insurance. And many of them likely have a policy with some insignificant death benefit, like 250,000.

I've run into people in my office that have, you know, one or two. two times through work, what they're being paid by salary. And they kind of fluff it off. Like, you know, that, that'll be there when I die. But it's really insignificant. And it also kind of asked the question to those television commercials that we all see. You know, for $13 a month, you could have an insurance policy that your family depends on. You know, while something's better than nothing, it could be argued that this policy holder is uninsured.

So it's important to take the time to really peel that onion when you're working with somebody. You know, they didn't start out on a short-term journey. They started out in one that they thought was going to be long, right up through to and including retirement. So this is the first bridge. You know, I love that I'm a, I'm a, I'm a wordsmith. I love words and I love how you said to and through. because just like you mentioned, you know, well, that's assuming you get to retirement. Let's plan what if you don't?

Well, to and through means you need to get to retirement, but also how long are you're going to live after retirement? And so I think those are just really big things that people really don't think about. So let's talk a little bit about what types of life insurance can contribute to those retirement plans. You mentioned term. That's one type. What are some other types of policies that can contribute to the retirement savings plan?

I'm really looking forward to talking about those, Mike. I just want to, something just tapped me on the shoulder here, and I just want to make sure that our listeners know about this one little hidden benefit, which is often overlooked in term insurance. You know, when you apply for insurance with an insurance company, that's the only time they get to check under your hood to see what your health profile is. having a term insurance policy enforced. Maybe you're young, you're not a smoker, you're in great health, so you're offered the best rates. Having that term insurance in force later on in life with the conversion option means that you won't be underwritten again. So maybe you've had a change. Maybe you've got something actually significant that's challenging your health right now.

you can take that term policy and you can convert that to a permanent policy, which we'll talk about in a second. So you have, in fact, insured the insurance, which is very valuable. And another reason not to put it off. That's a great point because just like we don't know what's coming around the corner, you don't know what your health is going to be. We don't know what the premiums are going to be on that term when it comes due in 10 or 15 or 20 years. That's a really great point. Well, let's get to your question. I think what everybody kind of wants to talk about here is how does life insurance fit into retirement?

Well, of course, we're not talking about term insurance anymore. And now we're talking about permanent insurance. So in permanent insurance, there's really two main types of permanent insurance, whole and universal. I'm not going to go down a complicated rabbit hole here talking about the different architecture and all these different policies. but I would like to talk a little bit about whole life. And my favorite is called index universal life. Okay. And without getting too much into it, as I mentioned,

generally, the most important thing is that permanent policies build cash value. So you're actually building equity in an asset. So regardless of which you were to choose, we just have to talk a little bit about how these plans actually come together. How do they work? Well, there's two moving parts in this thing, maximum and minimum. And again, I'm not going to make this complicated, but there are rules and regulations in this thing. The minimum is what the insurance company requires for the death benefit.

They have to make a profit. So that's going to be their rule. They control the minimum. The maximum is actually control. by the government. That's right, the government. And the reason that came about that way is because these programs, which we'll talk about in a moment, they can do something that very few investment vehicles can do. You can grow your money, tax deferred, you can have access to your money, tax-free, and you can plow a great deal of money into these programs. But the government in the

70s got to looking at this and said, you know, there's a lot of very well-to-do people. people that are abusing this. And so we're going to make changes. And we're going to introduce the maximum. And we're actually going to write it right into the U.S. tax code. I'm not going to get too much into it, but it's section 7702 and 72E. Those are important because they're right in the tax code. And if you do design these policies properly, Mike, then you've got one heck of a savings plan with perks. So we want to hit the minimum for the death benefit, and we've got to stay under that maximum

in order for this to be called life insurance by the IRS. What happens if you go over the maximum? Well, if you were doing it for the purposes of an investment, of a tax advantage investment, you just blew it because now your policy will not be treated that way. So it's very important that you go into this eyes wide open. It's not the kind of thing that probably that you'd want to do on the internet without some counsel. It's better to work with a broker that can help guide you through this.

So what I want to talk about really is the saving side of that, Mike, unless you have another question for me right now. No, I think that's great. And I think the point you brought up is so huge that we tend as humans to be quick and fast. And I heard one thing. Let me jump on that. Let me go Google. Let me go set this up.

But if you set it up the wrong way and the wrong setup, and like you said, put too much in, too little in, it's not going to work the way that you want. So I think that's a great point you bring up. Okay, good. So I just want to talk about why this is valuable. And I'm just going to look back quickly on the two different types of policies. So whole life is a life insurance policy that's very conservative. it's seen that way, it grows your money based upon bonds and in most cases dividends. I like the index universal life because that policy is based upon indexes that are equity

driven, like the S&P 500. So how does this whole thing work? Well, you pay your money, you pay your premium to the life insurance company. Remember, one part of that premium goes toward the death benefit. it must by law. The other part goes into your savings and investment side. That's like a savings account. By the way, this whole thing will self-complete if you die because it's life insurance. But let's talk about the actual savings account. Three things are happening inside of that account, and they're all in your favor. The first is called the participation rate. The second is the cap,

and the last is the floor. So let's just talk about that a little bit. The participant. The participation rate, I'm going to put two accounts side by side. One is an equity portfolio, and one is your indexed universal life policy, which I'm going to call your IUL. Okay? We've got $100,000 in each policy. The next year, the S&P 500 returns 10%. Both accounts now are at $110,000. We're doing great. The following year, the S&P, again, earns 10%. Well, now you're up to $121,000 in both accounts. That's, we're doing great. And forgive me, Mike, because I needed to, and I've got to go back. I got a little bit ahead of myself. I was talking about the participation rate and the cap. I'm going to say the participation rate, that's how much you get to keep. In this policy, we're

And say 100% of that. You get to keep whatever the index does, you get to keep it 100% up to the cap. The cap in my example, this is not on the hard drive for every single policy, just in my example. The cap is going to be 10%. So if the S&P earns 10%, you get the whole 10%. If it earns 12%, you get 10. 10. Got it.

So forgive me. And I'll go back to my example where both equity portfolio and your IUL have both performed marvelously for two years and you've got a 10% return in both. The third year, however, is a dark year. The third year, the S&P corrects by 20%. In your equity portfolio, you are now down to $96,800. So you've, after three years, you've got less than what you started with. how does it look in the IUL? Well, we have a floor of zero.

What does that mean? The floor of zero means that you're going to get a tap on the shoulder at the end of the year from the insurance company, and they will be telling you, Mike, we're sorry, we couldn't pay you any interest this year, but you get to keep everything that your policy has earned to date. You've got a zero interest for the year, but you keep everything that you have.

And next year we'll go again, But with you, in your IUL, it will be based on $121,000. Your equity portfolio, on the other hand, will have to be starting from $96,800. And by the way, it will need 25% to get back to $121. Yep. Wow. So that's the reason why they're very valuable savings tools. Yep.

And that floor is powerful because if you pull up the stock market or the news or your portfolio statement and you see drops, If your insurance policy has that floor, you never lost money. You just didn't gain money, but that's a huge, huge, safe, guaranteed aspect. Yeah. So all that money that's accumulating for yourself after the amount that goes toward death benefit. So can you re-access that or use that money for different purposes? What does that look like? Well, this is the second part of the magic, Mike, because this policy,

you have access to it throughout your life. But how are you actually accessing it? Well, if you were to walk into your bank and take money out of your savings account, that money's gone. It's in your pocket. In this policy, you're actually using the money that's been built up in your IUL as collateral for a loan. So you're borrowing the insurance company's money while your money continues to work, continues to enjoy the benefits of the index. That's a really powerful. But what can you use it for? Well, first of all, when can you use it?

With a traditional, like a 401K, for instance, you know, you've got this age 59 and a half rule where there's going to be penalties if you access it. Those rules are not found in these IEO policies. You can have access to your plan for any reason. The distribution, we're going to take it as a loan. Do you have to pay it back? No, you don't. It'll just be subtracted from your death benefit at the end. You can pay it back if you wish to,

but that loan comes to you tax-free. And you've got the flexibility and control of having no government restrictions or penalties on this, and you can use it for any purpose that you wish. Wow. You know, that's, it goes against or goes so opposite of what people think of life insurance. You know, like some of these things you're mentioning like, sure, there's the death benefit like we all think about. But then when your money accumulates into that cash amount, you can reaccess it. And while you're reaccessing it, your money in the cash value still is being grown by that index.

It's tied to. That's really powerful because a lot of people think you're just. just pulling money out of the cash side of things, but yet you're really just pulling, you're just using the cash as collateral, and you're really going against the death benefit. So I just think that that's a light bulb moment for a lot of people. And it really shifts the thinking from only purely death benefit for life insurance to some benefits that you can access while you're living.

So what are some of the other living benefits like riders or things that people, people can consider tacking into a policy like this? Well, I think one of the most advantageous thing these days is having access to it for chronic illness, like a chronic illness or a long-term care rider. You know, long-term care is, it's a whole other conversation, but it's something that is not covered by any health insurance. It's not covered by Medicare. And usually when it happens, it's an ambush.

It's something that was never on your calendar. It doesn't have to be an old age event, is what I'm trying to say here. It can be trauma. It can be a head injury. It could be a stroke happening to a young person. So having access to your policies, not only your cash value, but in some cases you can have access to the actual death benefit to help you and your family over that hump. Sometimes it's curable, it's correctable. What was, you know, thought to be

going to be taking a long time, like a chronic condition. Actually, they're able to, with, you know, medicine advancing, they're able to make some headway and you can actually reacquire yourself again. But where would you get the cash in the meantime? So these things are very helpful. Yeah, that's huge. That's probably the biggest. Yeah, I would say so. And just having that flexi to access the cash value for many things. Like you said, long-term care, that could come up. Or, oh, let me dip into that life insurance policy, cash value for paying for college or things like that.

So, again, you can't do this on your own. You shouldn't do it on your own. Get with a professional that can guide the process. And let's wrap up, Don, with this thought. I know you mentioned some tax implications. Talk about some of the tax benefits and implications of using life insurance. during retirement. Well, the most important thing, Mike, is that we have to look at what we have when we get to

retirement. Most of us have qualified plans. Of course, those are taxable. We kind of like to sit opposite our clients and talk about these three buckets, the taxable buckets, the tax-deferred buckets, and the tax-free buckets. And most of what people have are in the first two buckets. stock, stocks, mutual funds, savings accounts, those are all taxable and immediately. Tax deferred, like annuities, traditional IRAs, qualified plans like 401s.

Those things are taxed in the future. But, you know, it's really important to remember the qualified plans do two things. First, everybody knows they defer the taxes, but they do something else that's never talked about. They defer the tax calculations. And we don't know what the tax will be in the future. And that's why it's so important. So this vehicle that we're talking about, the IUL, belongs in a very coveted bucket, the tax-free bucket.

Things where we've got cash value life insurance is what we're talking about, Roth IRAs, and in some cases, municipal bonds, they can affect your Social Security, but you still have the joy of not having it affect your federal taxes. So it's nice to always be looking at the three buckets, in retirement. Where will you be drawing your income? Yep. And the word comes to my mind, balance. You don't listen to a certain strategy and go, that sounds great. I'm going to go all in and 100 percent. It's got to be a balanced plan. And some of these concepts that we're talking about here are a great balanced idea to make sure are part of your retirement plan, but get with someone who knows exactly how it should fit together for your circumstances because there's never one solution

for every single person. So, Don, this has been really great just learning some of these mindsets. If someone is interested in connecting with you to learn more, what's the best way that they can do that? Well, you can email me if you like at Don at dHretirement Solutions.com. And you're also welcome to call me in the 413 area code, 567-1745. It's my personal office number. Excellent. And I will make sure to also put your website address in the show notes.

So thank you so much for coming on today, Don. It was a real pleasure talking with you. Thank you, Mike. Appreciate you're having me. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show, or listen to past episodes, visit www.

www. www. Influential EntrepreneursRadio.com.