Retirement is an unavoidable stage and the bittersweet truth of life. These salt and pepper years carry dreams of peaceful staying at home and doing what you have always wanted to do. But, all this can be made possible only if you retain financial freedom on your retirement. Therefore, the earlier you think about your long-term investment planning, the better state you shall land yourself at a later stage.
Life insurance is an important aspect of personal finance. It can be useful not only in providing a cover in case of emergency situations but also in maximizing the retirement benefits.
Three ways in which a life insurance can help you in your retirement plans are as follows:
- Protection: In case of the policyholder’s demise, a term plan would provide a sum assured to the surviving spouse. It would help your surviving spouse to manage regular medical expenses, household expenses and be financially independent.
- ULIP: Unit Linked Insurance Plans are market-linked products that combine both insurance and investment. ULIP lets you enjoy a life cover as well as provide you an opportunity to earn by investing in the market. For those buyers who are nearing retirement and who want to avail the dual benefits investment plus insurance, Unit linked pension plan is the best investment option for them. Such insurance plans provide tax benefits.
- Endowment plans: There may be quite a few responsibilities such as your child’s higher education, your child’s marriage and so on which you will need to fulfill while nearing retirement. You wouldn’t want to exhaust your entire retirement corpus to fulfill these goals. For such fixed goals, you can invest in endowment plans which provide guaranteed tax-free returns along with loyalty additions which serve as a bonus for investing.
These are the three ways in which life insurance can help you maximize your retirement corpus.