Whether it’s offering the freedom to choose the type of investment, offering life coverage or tax advantages, here are five reasons why you can count on a ULIP to build your retirement corpus:
1- Fully customizable
When parking their money in a ULIP, the individual becomes responsible for all of their investments. From the choice of fund allocation to the distribution of funds, the investor does everything according to his needs. Thus, they can choose a combination of equity and debt instruments depending on the time they have to build the retirement corpus.
In addition, ULIPs offers the possibility to change funds at any time. For example, a young person who, at the start of his career, put most of his money in equity funds, may switch it to debt funds as he approaches retirement age. retirement.
2- Creation of long-term wealth
ULIPs are not a small investment of time. They come with a five-year lock-in period, encouraging the investor to keep their money invested for years. The longer a person stays invested, the better their corpus will be. Additionally, insurers also offer bonuses to motivate investors to stay invested for 10 years or more.
3- Tax-free investment
Another important factor that makes ULIPs a good choice for building up a retirement fund is that they fall under the EEA or
ULIPs also allow the investor to make partial emergency withdrawals which are also tax exempt. In addition, the life insurance payment made to the depositor’s agent is also tax exempt.
4- Life cover for loved ones
In addition to offering the freedom to invest as needed, ULIPs also provide individuals with life cover. In the event of a tragic incident occurring to the insured, his relatives receive a payment of the sum insured. Having life coverage is important when building your retirement corpus, especially if you’re the only one earning money.
5- Portfolio management
ULIPs are an even better choice for someone who is not a big fan or follower of market trends, as they might not want to switch funds manually. However, with a ULIP pension plan, the investor can share their retirement corpus goals with their fund manager and give them the freedom to make changes for them. These managers will move your money between loan funds and equity funds to maximize the return on your investment.
