5 Reasons to Build a Retirement Corpus Using ULIPs


Insurance FAQ: How to Build a Retirement Corpus Using ULIPs

New Delhi: Working for years and desiring a good and healthy body of retirement is the wish of almost every individual. As soon as people start their careers, they start looking for ways to amass a large retirement fund in order to enjoy their later years in peace. For this, an individual needs to invest and grow their money and one of the best ways to do this is by using a Unit Linked Insurance Plan (ULIP).
Not only are they a great investment tool for making money grow, but ULIPs also offer life cover, allowing individuals to financially protect their loved ones should something serious happen. Offering the dual benefit of an investment to achieve long-term goals and life coverage, ULIPs can be an ideal investment option for an individual.

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 Exempt-exempt-exempt Category. All money invested in ULIP is tax exempt. The money invested, up to a maximum of Rs 1,50,000 per year, is deducted from the taxable income of the investor. Moreover, the returns generated by the investments are also exempt from tax.

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.


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