Where Do Indians Stand On Retirement Planning? Are You Prepared?

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December 8
11:09 AM 2022

As responsible individuals, we want to build a better future for ourselves. So first, as students, we work hard to build promising careers. Then in our professional lives, we work toward fulfilling our life goals, like buying a house and a car, and ultimately, we strive for a happy and trouble-free retirement. But, according to a recent survey, this last bit is where many of us might falter. 

As per this survey, 80% of urban Indians are not ready for retirement. Have you ever thought about the best way to plan your retirement? Are you prepared to hit your second innings? The majority of Indians need assistance in planning their retirement. After you retire, your regular income may cease to be available, but your expenses will not go anywhere. In reality, the rising inflation of everything, from daily goods to emergency health services, will require substantial funds to ensure that you have a comfortable retirement. Therefore, you'll need to start saving money for the future, and thankfully there is no dearth of options when you decide to start retirement planning. In this article, we'll consider a ULIP plan and see how it can be a good option for achieving your retirement goals without any hassles. 

Understanding the meaning of ULIPs

A ULIP stands for a Unit Linked Insurance Plan. You get dual benefits of insurance and investment with a ULIP, meaning it provides both long-term investment opportunities and financial security for your family in case of your untimely death during the policy term. The premium you pay is invested (after deducting all applicable charges) into the fund options of your choice. These can be from equity, debt, hybrid/balanced or liquid funds. Depending on your risk tolerance and goals, you can choose your fund accordingly. This makes ULIPs excellent options for helping you accumulate wealth for retirement while safeguarding your family's financial future as well. 

How Can ULIPs Be Used for Retirement Planning?

ULIPs have many investor-friendly features that make them ideal for accumulating a retirement corpus. These features include:

1. ULIPs allow fund switching 

Consider the following scenario. You began purchasing ULIPs while the stock market was performing well. You chose an equity-based fund as a wise investor. However, the stock market has recently crashed, and you'd rather put your money into a more stable debt alternative. In this case, you can switch your UILP funds swiftly. Insurers offer a certain number of free-fund switches per year. It allows you to move your money around to achieve the best results. You can allocate more to equity if the market is doing well and maximize your returns, and pull back more towards debt if the market is veering downwards. 

2. Riders And Top Ups

You can pay top-up premiums to participate in a higher-yielding portfolio if you have extra money. You can easily add the extra money to your current plan for a small fee. Top-up rates typically range between 1% and 3% of the total premium, which is much less than the price for a new policy. Your regular activities should not be hampered due to a lack of funds. As an investor, you can keep track of how your investment is performing and where it is located. At the same time, you can expand your coverage with various riders. These may cover you for accidental death, disabilities, critical illnesses, and so on. 

3. A ULIP offers a healthy rate of return on investment

When investing your hard-earned money, there are two factors to consider: security and profits. ULIPs ensure these bonds, endowment plans, FDs, pension plans, as well as other financing options provide significantly lower average returns than ULIPs. Because of diversification and excellent investment advisors, you get the benefits of the equity market at a much lower risk than originally anticipated. Staying invested for the long haul can reap rich rewards and help you shrug off temporary market fluctuations as well. You can also use fund-switching to minimize your risks whenever needed. 

4. Multiple premium payment options

Policyholders can pay a single lump sum premium at the insurance policy's start or pay in instalments over time. Regular premiums are pre-determined amounts that must be paid by the policyholder regularly, such as yearly, semi-annually, quarterly, or monthly. With ULIPs, you can pay a lump sum in addition to the regular premium.


Thus, with these features, ULIPs allow you to create long-term wealth and a mass sizeable funds for your retirement. Make sure to use a retirement calculator in tandem with a ULIP calculator to determine the amount of money you need to save and which ULIP will help you achieve that amount. Start your retirement planning today!

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