Best Strategies To Use Life Insurance For Retirement

Everyone makes glorious retirement plans. However, to ensure everything goes as planned, a person needs to make the right investments at the right time. The most appropriate step in this direction is to invest in comprehensive life insurance for retirement.

1. Retirement Plan and Unit Linked Insurance Plans (ULIPs): For a regular income retirement plans comprise of two modes - annuity and accumulation. An annuity plan can be an option when you are not looking for a death benefit but a monthly income after retirement. You can earn some tax benefits as well by choosing the annuity plan.In the case of an accumulation plan, if you aim to get a regular income after retirement, you can surrender the policy for its cash value, or it can be sold in the secondary market. As your plan matures your income starts coming in at the vesting ageset by the insurance company. ULIPs are another type of policy that provides insurance cover, as well as ensures regular income inflows by investing a part of the policy in the capital market for returns.
2. Whole Life Insurance and Endowment Plans: To pay off liabilities or obtain a lump sum A whole life insurance plan for retirement takes care of all your liabilities for the entire life. Moreover, if preferred, the assured sum can also be transferred as wealth to one of the beneficiaries.

A whole life insurance functions as a saving plan, while simultaneously also allows the holder to borrow against it since it has an associated cash value. Additionally, if a person is suffering from a chronic disease such as Alzheimer’s after retirement, the whole life insurance plan allows a death benefit before death and also covers the cognitive impairments due to the disease.Quite similar to whole life insurance, an endowment plan also provides a lump sum amount after the maturity of the policy to the holder. It can help in paying off liabilities effectively on the maturity of the policy or after death.

The choice of life insurance for retirement should depend on your goals, suitability of the plan, and your capability to pay premiums. If chosen wisely, an insurance plan can be your most bankable asset for the golden retirement years.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.