Several types of insurance policies provide life cover as well as regular returns.
Most salaried employees have PPF and gratuity savings, which are partially financed
by their employer. On retirement, the employees get a lumpsum amount as their PPF
or gratuity settlement. So even if they don't have any other savings, they have
at least something to depend on for their retirement needs.
However, for self-employed individuals, the picture is completely different. A self-employed
person needs to manage all finances on his own, whether it is business, income,
investments or retirement. Such a professional does not have any compulsory savings.
Hence, when a self-employed person retires, he may have nothing to depend on.
Retirement planning is therefore even more crucial for self-employed individuals
than it is for a salaried employee. By choosing the right type of life insurance
policies, you can not only get adequate coverage, but also ensure that you get regular
income when you stop earning from your business.
Goal-based investment planning
First and foremost, list down your financial goals and requirements. Plan to invest
for your retirement based on your changing needs in every stage of life.
If you cover yourself and your family with a good term plan, your dependents like
spouse or children will remain protected in case of an unexpected event.
There are several insurance plans that provide regular returns, which will be especially
useful for your retirement. These plans provide life coverage as well as regular
income in the form of annuity. Consider investing in insurance policies like ULIPs,
endowment plans, money-back plans, etc. so that you have regular income to meet
expenses when you retire.
When you are nearing your retirement age, you should also consider adding a few
riders like accidental, critical illnesses, waiver of premium, etc. to your life
insurance plans. These riders provide additional coverage for events that are usually
not covered by your life insurance policy.
Just like you plan your business activities, you need to plan effectively for your
retirement too. The various types of life insurance plans available today can be
your tools for the same.