Retirement is a time when you should get to live worry-free. You have worked long and hard for so many years of your life. You should have the financial freedom to relax and live life on your own terms now. A good retirement corpus can be extremely helpful in this regard. If you have not considered unit linked insurance plan (ULIP) before, then now is the time to do so for your retirement.
- Long-term investment vehicle
ULIPs are not for the ones looking for small-term investments. They are meant for the ones who are in it for the long haul. With an extended lock-in period of five years, they are meant to encourage the investors to save and invest their money for years. When you stay invested for a longer duration and make the right kind of investments, your retirement corpus increases.
- A completely customizable option
When you choose an ULIP, you hold the reins of all your investments. You can decide how much you want to invest and where you want to invest it. Of course, you can take your fund manager’s advice in doing so. However, you still have the freedom of choice. Maybe you want to start your ULIP journey with equity funds and move on debt funds later. Or, maybe you want a balanced mix of the two. You get to decide as per your needs.
- The life cover with death benefits
A major benefit of ULIP is that they also come with life coverage and death benefits. If you are the primary earning member of your family, you would want to have this provision. At the end of the day, you want your family to have financial protection even in your absence. They should not be dealing with monetary losses at a critical point in their lives.
- A tax-free form of investment
ULIPs are a great choice when you are trying to save up on taxes. Under Section 80C of the Income Tax Act, all the money that you invest in the fund gets tax exemptions up to INR 1.5 lakh. Moreover, the returns that you get on that investment also get tax deductions. The insurance payout that your nominee gets also has tax exemption. In fact, if you make any partial withdrawal from the ULIP fund, you will not even have to pay taxes on that. Isn’t it a win-win situation?
- Easier to ensure portfolio management
If you want good returns without getting into the finer nuances of market fluctuations, ULIPs are a good choice for that as well. You will just have to let your fund manager know about your financial goal – a handsome retirement corpus in this case. Let the fund manager decide whether the investments should go into debt or equity funds as per the market situation.
So, get in touch with your bank to know more about the details of buying an ULIP. Discuss your risk profile and your long-term goals to get a policy that suits you the best.