In the current era, you always look forward to keeping your life active and engaging. While this is mostly manageable while you are still earning, but gets a little tricky after retirement. After your retirement, you will need funds to manage your routine life while also engaging in a business or hobby that can keep you engaged. But you will also need enough money to maintain your lifestyle and pursue those hobbies and businesses. So, you should work on your retirement corpus planning, but how?
There are different methods to plan for your retirement, and among them, ULIP for retirement is a fair, convenient, and beneficial option. Here is how you can build your retirement corpus with ULIP Plans in India in 2023.
What Is A ULIP Plan?
A ULIP Plan is a comprehensive life insurance plan that provides dual benefits, life insurance and the option to invest in financial securities. Therefore, with the ULIP insurance policy, you can secure your family with the death benefit in the event of your unexpected demise while also ascertaining funds as a maturity benefit based on market-linked2 returns.
In a ULIP insurance plan, one portion of your premium will be utilised to provide life insurance coverage, and another will be invested in the financial market for market-linked2 returns.
How To Build Your Retirement Corpus With ULIP Plans in 2023?
ULIP Plans provide certain unique flexible features that help build a profitable retirement corpus investment in India. Here is a detail about these features and how they can be utilised best to build the required funds.
Analyse your requirement
Firstly, it is important to analyse the funds required for your retirement needs. Every individual has a unique lifestyle and family financial commitments that define specific financial resources. Therefore, you must discuss with your family what you plan to do with your life after retirement. Any family obligations, such as your child's education, marriage, and routine expenses, will define your post-retirement fund requirement.
Then, based on these requirements, decide on the funds required, accounting for the inflation rate. These funds will be the basis for your ULIP pension plan.
Decide on the life cover
As a significant portion of the amount is utilised for the life cover, it is important you calculate the requirements and ensure there is a sufficient sum assured for your family in the event of your unexpected demise. Deciding on life cover is crucial for retirement planning, considering the dependency of your family on your income.
Decide on the ULIP Fund Options
ULIP insurance provides varied fund options based on the different risk profiles. For example, you can choose between low-risk debt funds, high-risk equity funds, and medium-risk hybrid funds.
When purchasing our Tata AIA ULIP Policy, you can manually allocate your investment to the fund options or utilise our automated options for a better and well-informed decision. For instance, when you choose our Tata AIA Automatic Asset Allocation, the Enhanced SMART allows you to enter the financial market in a structured manner by choosing a debt oriented and an equity-oriented fund. You can utilise the Tata AIA ULIP Calculator to work on these allocations.
Switch between fund options
The ULIP insurance plan also provides the option to switch between the fund options based on the changing market scenarios. For instance, you can switch from equity funds to hybrid or debt funds when the economic situation is not favourable for the financial market to increase in value.
Choose a long-term Investment
When planning for the retirement corpus investment, you must look for a long-term investment. The longer the policy term, the higher the benefits during the long term. ULIP insurance plans have a lock-in period of 5 years and offer the option to invest for a long term, such as 15 - 40 years.
Customise your ULIP Policy
The ULIP insurance plan also allows you to pay for the investment based on your financial condition, such as choosing between single, limited, and regular premium payment options. For instance, if you have started late, you can pay the premium for a limited term while ensuring the ULIP insurance benefits for the entire policy term as applicable.
Utilise online portfolio management
If you choose any of Tata AIA life insurance products, you can use a well-established online system to manage your account. You can access the different products, monitor your funds, make the necessary switches, and manage the investment based on your convenient time and space online. It is simple, user-friendly, and less time-consuming.
Factors To Consider
When investing in the ULIP pension plan, you must consider certain factors to ensure you get the maximum applicable benefits. Here are a few to help you out.
Start investing early - The earlier you start investing, the longer you can stay invested and get higher returns, considering the lesser family commitments.
Compare and choose - There are various ULIP policy options available online. You can compare and choose the best ULIP plan by considering your financial condition and future retirement needs.
Keep monitoring and increasing premiums - As your age increases, your commitments and priorities will change at different stages in your life. Therefore, monitor your ULIP policy and increase the premium to enhance your investment for retirement corpus in India.
Financial planning with the best ULIP plan for retirement in 2023 is considered one of the best ways to build your retirement corpus. With the flexible features of ULIP insurance, you can customise your investment based on your financial condition, risk appetite, and long-term investment goals. With careful analysis, proper fund allocation, and regular monitoring, you can build a substantial retirement corpus and secure a financially stable retirement life. So, start planning and investing in ULIP plans today for a comfortable and fulfilling retirement tomorrow.