Aditya Birla Sun Life Insurance Company Limited
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Every working individual dreams of stress-free and peaceful retirement life. Happy retirement life needs careful and advanced financial planning to build a sufficient corpus to ensure financial stability post-retirement. To maintain the same lifestyle and to meet all the emergency requirements, you need to invest and save for retirement living in a disciplined way. There are various financial products available in the market for long-term goals like retirement planning. Life insurance is one such financial product that can help you plan for your retirement.
When we say life insurance, many people think that life insurance is only purchased to avail financial protection for loved ones during an unforeseen situation like the untimely demise of the policyholder. However, there are life insurance plans that are offered by the life insurance companies to meet various needs of the investor along with providing life cover. There are many life insurance cum investment products offered by these insurance providers that are specifically designed to meet long-term goals like retirement, children’s higher education, etc. Let’s take a look at the life insurance products that are suitable for retirement planning and how you can use them to create a significant corpus for your golden years.
The following are the life insurance plans that can be used for retirement planning:
1. Retirement Plan/Pension Plan
Retirement life insurance plans are life insurance plans that are tailor-made to meet your retirement needs. Retirement life insurance plans are a disciplined way of saving for your retirement life that helps you retire without worries. Most retirement plans come with the benefit of both life cover and vesting benefits to receive the pension post-retirement. In a retirement plan, you make premium payments on a regular basis till the date of vesting or for the premium payment period as per the policy terms. The amount of premium that you pay gets invested in building a significant corpus for your retirement life. Basically, retirement plans have two phases:
Retirement plans or pension plans also offer life cover that gives financial protection to your family even when you are not around in this world by making a lumpsum benefit payout during an unfortunate situation. Pension plans are specifically designed to provide you with steady cash flows. You can choose the pension frequency- monthly, quarterly, half-yearly, or yearly as per your convenience and need.
2. Unit Linked Insurance Plan (ULIP)
Unit-linked insurance plan (ULIP) is a market-linked insurance product that is hybrid in nature. This gives you the benefit of both life protection and wealth creation by investing in various securities through funds. You can invest in funds and choose the asset allocation based on your risk appetite and investment preferences. As ULIP allows you to invest in the market, you can maximise your investment return over the long term to build a sufficient amount of retirement corpus for yourself. Life cover offered by the ULIP protects your family during eventualities. ULIP comes with many unique features and flexibility, such as switch option, partial withdrawal, etc., which helps you plan your retirement at your convenience.
3. Endowment Plan
Endowment plans are life insurance products that offer the benefit of long-term savings. Part of the premium that you pay for life insurance provides you with life cover, which offers the death benefit in case of eventualities during the policy term to your loved ones. And the rest of the premium is invested in government securities and bonds to create wealth for your future which can be utilised as a retirement corpus. In an endowment plan, if you survive the policy period, the survival benefit will be paid to you at the end of maturity, which includes the sum assured and the bonuses. This lump sum maturity benefit can be utilised as a retirement corpus.
4. Whole Life Insurance Plan
A whole life insurance plan provides financial protection to the policyholder’s family throughout the policyholder’s life or up to 100 years of age. That means the policy provides life protection even after the maturity of the policy. If the policyholder survives up to the age of 100 years, endowment coverage is paid as a survival benefit. These long-term plans can be used to create wealth for retirement.
Every life insurance plan comes with a variety of additional benefits or riders, which can be availed at an additional cost of the premium to enhance the coverage benefit. While saving for retirement, you can even opt for riders like critical illness rider, accidental death benefit rider, accidental disability benefit rider, income rider and waiver of premium rider, etc. You can enhance your investment in life insurance by availing the suitable riders.
Here is how life insurance is useful for retirement:
Apart from term insurance plans that offer pure life protection to your loved ones against the uncertainties of life, there are investment-oriented life insurance products that you can consider to invest for your long-term goals, like building a retirement corpus. You can compare the plans online and choose the best suitable life insurance product to invest in for your retirement goals based on your investment preference. Plan for your retirement in advance and start investing early to build a significant retirement corpus.
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Give ₹1 lakh/ month for 5 years and Get ₹ 4.06 lakhs every year till your life1
Multiple annuity options, Regular income stream.
Guaranteed# lifelong income
Top-up option for annuity
Single/Joint Life cover option
Deferred annuity option
Give :
₹ 1 lakhs/Month for 5 year¹
Get :
₹4.06 lakhs/-
Guaranteed returns after a month¹
1 Annuitant -Health Male: Age 45 years invests in ABSLI Guaranteed Annuity Plus | Annuity Option: Deferred Life Annuity with Return of Premium | Premium payment term – Limited pay (5 years) | Purchase Price: Rs. 1,00,000/ month including modal loading for 5 years | Deferment period: 5 years Annuity Pay-out Frequency: Annual | Single life. Get Rs 4,06,340 /- (Exclusive of taxes) every year till annuitant is alive.
ABSLI Guaranteed Annuity Plus Plan is a Non-Linked, Non-Participating, General Annuity Plan (UIN: 109N132V15).
²Tax benefits are subject to changes in tax laws. Kindly consult your financial advisor for more details.
# Provided all due premiums are paid.
ADV/11/22-23/2072
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