Compare & Buy Car, Bike and Health Insurance Online - InsuranceDekho
Claim, renew, manage & moreLogin

Are ULIPs A Good Choice Of Investment For Retirement Planning

Published On Feb 16, 2022, Updated On Feb 17, 2022

A well-planned retirement reduces the need for borrowing money during a vulnerable moment in a person's life whenever they don't have a steady source of income to meet their necessities. Individuals should ensure that financial policies are quite well understood and that any ambiguity has been resolved to avoid having to redo investment selections.
A ULIP (Unit Linked Insurance Plan) is a sort of insurance that allows you to save for the future while also providing you with protection. A ULIP is an excellent alternative for a retirement plan since it is a long-term investment. A ULIP, like a term insurance policy, necessitates continued investments from the insured in the kind of premiums paid to the insurance provider. To know more about ULIPsbeing a good choice for retirement investments, read on.

Why Should A Person Invest In ULIPs?

Following are the listed reasons for a person to invest in ULIPs -

1. Investment Returns

When it comes to investing, the two most crucial elements to consider are security and rewards. When a person purchases a ULIP, he or she receives both of these advantages. Other investing choices, such as pension endowment plans, offer a higher average return than ULIPs. One of the grounds why ULIPs are so popular is that the premiums are based on market-linked returns.

2. Investment Option

ULIPs are different from those other investment alternatives in that they take into account each person's unique financial demands as well as risk tolerance. Based on the financial goals and capital requirements, a prospective buyer can invest in stock, bond, or hybrid products.

3 .Dual Benefit

The ULIP is a unique financial instrument in India that combines the benefits of investing and life insurance coverage into a single investment. As a consequence, an individual will no longer need to buy separate insurance and investment plans to safeguard their future. Individuals can save a great deal of money on premiums and better manage their finances as a result of this.

4. Insurance

Security must be a part of every investment plan. To cover it, a portion of a ULIP's premium is used. This protects a person's loved ones' financial security while they are abroad.

5. Flexibility

If a person's investment isn't producing the intended results, ULIPs provide them the choice to swap between funds to boost their earnings. Individuals usually choose stocks funds for high returns at the start of their investing process, then switch to debt or a blend of debt and equity funds when they draw near to their investment goals for further protection. Whenever the economy is very tumultuous, the same rationale applies.

6. Assured Sum

When a person buys a ULIP, the insurance policy guarantees a certain amount of funds to the nominee in the case of the person's early demise within the policy term. The Sum assured, as it is termed, is a fixed amount that is tax-free.

7. Withdrawals In Lock-In Period

When making any type of investment, people are typically not required to create partial withdrawals during the lock-in period. ULIP benefits, on the other hand, allow for withdrawals at any time throughout the lock-in period. However, additional fees and deductions are taken from the amount when such withdrawals are made within the lock-in period.


Equity funds are invested in business equities and have the most profit potential, but they also have the highest risk. So because premium was invested in government assets, debt investments are the safest, but the returns aren't as excellent as equity investments. Finally, as the name implies, combination funds allow investors to choose how much equity and debt they want to participate in, depending on the risk tolerance. Inadequate retirement preparation might lead to a person abandoning their aspirations in their senior years. Setting money away for just a pension fund which will allow a person to retain their present living once they retire is a smart idea.

Also Read: Understand Why You Should Buy A Unit-Linked Insurance Plan (ULIP)

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

Popularly Opted Term Insurance Sum Assured

People Also Read

Must BuyMust Buy

Why to Buy Life Insurance Policy Online from InsuranceDekho

  • Tax benefit upto 1,50,000*
  • Claim support everyday 10AM-7PM
  • 50 Lacs+ happy customers
Find the right life insurance for you
By clicking, I agree to *terms & conditions  and privacy policy.
Find the right life insurance for you
By clicking, I agree to *terms & conditions  and privacy policy.