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Can I Use ULIP For My Retirement Planning?

Published On Dec 31, 2021, Updated On Jan 03, 2022

We work to improve the future every day of our lives. As students, we work hard to achieve a successful career. In our professional lives, we also strive to ensure a joyful and simple retirement. To attain your objectives, you will need to put in a lot of effort as well as good financial planning.

Your monthly cash flow will stop after you retire, but your bills will be paid. In fact, rising healthcare expenditures may cause them to rise in the future. To cover these costs, you'll need to start saving for a pension. The use of ULIPs (Unit Linked Insurance Plans) to save for retirement is becoming increasingly common.

ULIPs bring together the advantages of both insurance and mutual funds. The product's fundamental nature makes it easier to plan for retirement.

Can ULIPs Be Used For Retirement Planning?

Let's look at the characteristics that make ULIPs such a useful financial tool:

1. A ULIP Guarantees A Higher Return

Security and returns come to mind when it comes to investing your hard-earned money. ULIPs offer both services. Other investment choices, such as bonds, endowment plans, FDs, pension plans, and so on, have much lower average returns than ULIPs. The large returns are due to the money being invested in the stock market. You gain from the benefits of the equity market at a significantly lower risk than the actual equity market due to diversification and professional fund management by experts.

2. The Option To Change The Premium's Amount

Policyholders can pay a single premium in full at the start of the policy term or pay in monthly instalments. Regular premiums are pre-determined payments that must be paid on a regular basis, such as annually, semi-annually, quarterly, or monthly by the policyholder. With ULIPs, you might pay an amount in addition to your current premium.

3. Switchability Is Possible With ULIP

Consider the scenario that follows. When the stock market was functioning well, you began investing in ULIPs. As an informed investor, you chose an equity-based fund. The market has tanked in recent years, and you'd rather put your money into a safer loan option. How do you intend to proceed? You can change funds in ULIPs based on their performance. Each year, most financial institutions offer four free exchanges. It enables you to move money around in order to attain the best results.

4. Riders And Supplements

ULIPs allow you to pay top-up premiums to invest in a higher-yielding fund if you have extra cash. For a little cost, you can add the additional funds to your current plan. Top-up rates usually range from 1% to 3% of the entire premium, which is significantly less than the cost of a new policy.

When you're retired, you'll be at your most stress-free. Your regular activities should not be hampered by a lack of funds. ULIPs take care of that while allowing you to indulge in some treats. As an investor, you can keep track of how your money is doing and where it's going. All of the information will be accessible over the internet.

5. The Option Of Selecting A Rider

By selecting alternative features or riders, ULIPs let you customize your plan and offer more protection. One of the most popular riders available is the Unit Linked Accidental Disability Benefit rider. One of the best elements about ULIPs is the possibility to tailor plans.

6. ULIP Gives You A Lot of Options

Everyone's risk appetite is different. ULIPs understand this and provide investors with a diverse variety of investment options. To pick from, there are three basic sorts of funds. The major focus of equity funds is stock investing. The focus of this investment is bonds, government securities, and other debt assets. A balanced fund combines the two types of investments.

There are a plethora of funds available under each of the three primary options, with nearly endless permutations. Based on the firm, sector, equity, and debt percentage-wise combinations, there is a specific fund for everyone. You can pick the best option for you. You can also change the fund choices.


Companies are creating ULIPs to satisfy a range of customer goals, and they are a unique offering. ULIPs are becoming more popular as part of people's retirement and life goals plans. Have you looked at pension schemes more after obtaining a ULIP? While ULIPs are good for retirement planning, pension plans have their own set of advantages. Pension plans are important considering even if you presently have a ULIP in place.

Do read - Will My Annuity Plan Work The Best For Me?

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.

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