Americans worry a lot about retirement.

Will their savings hold out? Will Social Security still be around? Will healthcare costs gouge a great hole in their finances?

What many of them may not be aware of, though, is that if handled correctly their life insurance policies could play a role in making retirement a little more secure.

One of the big tricks for having a successful retirement is to make sure you have enough cash flow to pay your bills and still be able to enjoy life. Few people have pensions any more. Social Security only helps so much. However, if structured the right way, a life insurance policy could be the perfect life preserver in retirement.

How does that work? Essentially like this: Over the years, a person pays premiums into a permanent life insurance policy with the intent to provide a death benefit as well as cash-value accumulation for as long as the policy remains in force. When you need money for retirement, you can withdraw funds without paying income taxes, generally up to the amount of the total premiums you paid into the policy. If you go over that amount and still need money, you can take loans against the cash-surrender value, although that means if you die any outstanding loan and interest amount would reduce the amount your policy beneficiary would receive.

Using supplemental life insurance for retirement planning comes with a number of advantages. A few of those include:

Avoid extra costs. The policy can provide retirement income without excessive administrative costs or government reporting. That means a greater portion of the money goes directly to help the retiree with day-to-day living, rather than in fees paid to someone for managing a retirement investment.

No contribution limits. Annual contribution, vesting and participation limits don’t apply. For example, with an IRA, you can’t contribute more than $5,500 annually if you are younger than 50 or $6,500 if you are younger than 60. That’s not the case if you have structured a life insurance policy as part of your retirement planning.

No early-withdrawal penalty. The cash value is available for your needs without any penalty for early withdrawal. Most people probably know that if you withdraw money from your IRA or 401(k) before you reach age 59 1/2 you are charged a penalty along with having to pay income tax on the withdrawal.

Leave an asset that’s tax free. When you die, the death benefit is generally received tax free by the beneficiary. That’s not the case if you leave your heirs a traditional IRA or a 401(k).

People usually view the life-insurance premium they pay each month as just one more bill. Instead of thinking of it as a bill, though, it should be viewed as a contribution to your retirement, just like the contribution you make to your IRA or your 401(k).

Brett Sause, an 18-year veteran of the financial services profession, is CEO of the Atlantic Financial Group LLC (www.atlanticfinancialgroup.org). Brett has been awarded both the National Quality Award and the National Sales Achievement Award from NAIFA. Brett has been featured in numerous financial publications, such as Life Insurance Selling Magazine and Advisor Magazine and has been the keynote speaker at many insurance and financial practices around the east coast.