Best Strategies To Use Life Insurance For Retirement

Retirement planning can alwaysi be better with lifei insurance. To understand youri life insurance retirement strategy,i let’s find out howi different insurance can helpi you with your retirementi planning.

We all wish toi retire rich, and therei are numerous ways toi achieve this. The onlyi thing that we needi is to know thei ways that can helpi you achieve your retirementi investment corpus. You cani start your saving fori retirement at an earlyi age by investing ini different retirement savings plani and maximising your returns.i Life insurance also playsi an important role ini giving you the desiredi returns on your retirement.i Let’s have a looki at different life insurancei retirement plans that couldi help you with youri planning:

1. Unit linked retirementi plans

2. Endowment plans

3. Retirementsi plans

4. Whole life plans

Howi does Pension Unit Linkedi Insurance Plans (ULIPs) ori Unit Linked Retirement Plansi work?

This is a market-linkedi product which ensures twini benefits of insurance andi investment (saving for retirement).i One part of thei premium is used fori getting a life coveri while the other parti is invested in capitali markets.

Depending upon the riski appetite of the investor,i insurance companies invest ai part of the premiumi in debt funds, equityi funds or even hybridi funds. This is ai much-preferred insurance product asi it covers life-risks tilli the scheme is ini force and also ensuresi returns from the moneyi invested in the market.

Howi does Endowment Plans work?

Thisi policy is designed toi pay the insurer ai certain lump sum amounti after the maturity periodi or in case ofi death. This policy isi an opportunity for longi term saving for retirement,i if the insurer livesi till the maturity period,i the company pays survival/maturityi benefit. In case ofi death of the insurer,i the company pays thei nominee the entire deathi benefit. This kind ofi plan helps to buildi a retirement corpus andi also provide a financiali solution for the family.

Howi does Retirement Plans work?

Retirementi plans or pensions plansi are designed to meeti the retirement needs ini a pocket-friendly way. Retirementi plans can be dividedi into two phases- accumulationi phase and annuity phase.

Accumulationi phase:

This is a phasei where one pays premiumi during the entire policyi tenure. This premium isi then invested in thei securities by the insurancei companies. The investment donei in the securities growi overtime leading to accumulationi of capital.

Annuity Phase:

This isi the phase where onei gets returns on thei invested amount. On thei maturity of the policyi or once you retire,i you start getting ai regular income monthly ori quarterly according to thei option or mode youi opted for. The vestingi age for receiving thei returns is set betweeni 50 – 70 years.i This policy ensures ai regular cash flow afteri your retirement.

How does Wholei Life Insurance work?

As thei name suggests, this insurancei policy covers the entirei life of the insureri till the age ofi 100. At the timei of the death, thei assured sum along withi the bonus (if any)i is given to thei nominee. If the insuredi survives beyond 100 years,i the matured amount isi paid to the insured.

Conclusion

Ifi you wish to geti the best from youri life insurance plans, youi have to start investingi at a very youngi age so that youri money remains invested fori a longer duration. Youi need to decide thei amount that would sufficei your retirement expenses consideringi inflation growth and theni choose the best pensioni plan.