ULIPs for Retirement planning

You know that you will not always going to be employed, the only reason why you want to prosper and save more is that you can retire one day and do whatever the heck that you dreamed of doing. It could be going on a world trip or taking a small little farm and enjoying your old age in the best way possible.

Retirement is the end of active employment it means that you will not be having regular income. So, you will have to plan for your retirement as early as possible. Earlier the families had more than one or two children and the parents knew that they can rely on the traditional support system of the younger generation taking care of the older. But now that people are opting for one or two child, they can no longer rely on the traditional support system.

The cost of living is increasing at an alarming rate and hence preparing for it is necessary. The development in healthcare has led to increase in the life expectancy of a person, you will have to prepare for the long years that you will have to do without the regular income. It is no news that old age means having to deal with a wide range of health conditions from diabetes to heart problems to BP problems. The medications for the same don’t come cheap. You must also bear in mind the additional expenses that you will have and save up funds to meet all the expenses and for you to have a comfortable life.

Once the money is accumulated, you will start availing the vesting benefits. The vesting benefits start from the ages of 40 and goes up to 70 years for most plans.

Types of ULIPs offered for Retirement Insurance Planning

1. Single premiums:

The premiums have to be paid at once at the beginning of the plan.

  • HDFC Life Single Premium Pension Super Single Premium ULIP: This creates corpus over the policy term to generate post retirement income for life.

2. Endowment plans:

You will be paid a lump sum amount after a specific period in the endowment plan. The various plans that offer endowment policy are:

  • Max New York Life Partner Plus: This is a traditional plan with bonus facility. Premium is paid for entire premium paying term that is selected by the policy holder. The policy continues till the life insured turns 75 years old. If the insured dies during the policy tenure, the death benefit of sum assured is paid irrespective of the survival benefits that have already been paid.
  • Kotak Capital Multiplier Plan: This is a traditional participating endowment plan. There are two phases, accumulation and withdrawal phase. Once the premiums are accumulated, you can choose to withdraw the money as and when you require.

3. Annuity:

Annuity is fixed sum of money that will be paid to you at your retirement on a regular basis.

  • HDFC Life New Immediate Annuity plan: This is a non-linked traditional annuity plan that offers various annuity options and provides you with an opportunity to live life on your own terms after retirement. Guaranteed income is offered for as long as you and your partner lives.
  • Bajaj Allianz Swarna Vishranti: This is a traditional deferred annuity plan. There are two parts in the plan, deferred period and annuity period. In the deferred period, the premium needs to be paid and in the annuity period the annuity is paid to the insured. High sum assured rebate is offered. Premium discounts are offered to the female policyholder. You can avail death, maturity and income tax benefit with this plan. There are 5 additional riders available with this plan.
  • ICICI PruForever Life: This is a regular premium pension plan that offers you a secured life cover during the accumulation phase. It offers 5 ways to get your pension after retirement. Add-on covers and tax benefits are offered. In the event of your death, the nominee will be paid the sum assured and guaranteed additions and vested bonuses.
  • ING New Best Years: With this retirement plan you are offered the flexibility to decide the time, amount and the frequency of annual premiums each year. The contributed premiums are allocated to the investor's Individual Pension Account. Fund value can be encashed. You can choose the annuity provider at maturity and also encash the entire fund value as per your convenience.
  • BSLI Secure 58 Plan: You will have guaranteed corpus of funds while you are retiring. The survival benefit will be accumulated over the years as well. You get guaranteed vesting benefit, growth in savings, freedom to choose your annuity, freedom to access the money when you need it the most and to protect your family.

4. Pure Pension Plans:

You choose a certain term for which you will be paying premium, and you choose at what age you would like to receive pension. If you die in the policy term, the nominee will receive the entire sum assured.

  • SBI Lifelong Pension Plus: This is a traditional pension plan, where you get total safety and security. You get maturity, death and add on cover benefits with this plan.
  • Kotak Capital Multiplier Plan: This is a traditional participating endowment plan. There are two phases, accumulation and withdrawal phase. Once the premiums are accumulated, you can choose to withdraw the money as and when you require. It also has a bonus facility.

5. Sum assured that is returned to the nominee if the insured dies during the accumulation period

  • Aviva Secure Pension: This is a traditional pension plan where you have the option to make regular savings during your income earning years. You get regular income after you retire. You also get guaranteed additions, simple reversionary bonus and terminal bonus. Benefits that you will get are death, maturity and income tax benefit.
  • Sahara Amar Jeevan: This lets you save small amounts for your post retirement expenses. This is also a deferred annuity pension plan.
    • The other plans offered where the sum assured is returned to the nominee if you die during the accumulation period are:
      • Bajaj Allianz Swarna Vishranti
      • ICICI Pru Forever Life

GST of 18% is applicable on life insurance effective from the 1st of July, 2017

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