How to Use Life Insurance For Retirement Planning?
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Life insurance is the only category that gives not only the comfort of life insurance but also long-term savings. But one needs to save wisely in the financial products that can give one long-term returns.
Retirement plans are especially designed to meet the retirement needs. A retirement policy helps you to plan retirement in a secured and pocket-friendly way.
Read: Why is Life Insurance Important?
Life Insurance Plans Suitable For Retirement Planning
Following are the types of life insurance plans which are ideal investment solutions for retirement planning -
1. ULIPs
A ULIPis a combination of insurance and investment. The part of your premium is used for providing life cover and the rest is invested in various funds.
The funds can be allocated as per risk appetite. There are various investment options like in bonds, equities, debts, or hybrid funds.
2. Endowment Plans
An Endowment plan gives you opportunity for long-term savings. Plus, part of your premium is utilized to provide the life cover. If the life assured survives throughout the policy term, on maturity, the company pays Survival Benefit. And if the life assured dies during the policy tenure, the insurance company pays death benefit to the nominee. There is an opportunity to yield some extra bonuses gradually in endowment plans, which are paid either on maturity or to the beneficiary under death claim.
Must Read: What Is the Right Age to Purchase Life Insurance?
3. Whole Life Insurance Plans
A whole life insurance covers life assured for whole life, or up to the age of 100 years. If the life assured dies before maturity, the sum assured along with bonuses is paid to the nominee. However, if the life assured survives up to the age of 100 years, then the matured endowment coverage is payable to the life insured. Whole life insurance plans offer partial withdrawals or regular payouts after completion of premium payment term which could help you post retirement.
Also Check: Reasons To Purchase A ULIP
