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Can ULIP Be Used For Retirement Planning?

Updated On Mar 01, 2022

All through our lives, we seek to make the future a better place. We study hard as students in hopes to provide a great career. In our professional life, we also aim to secure a happy and uncomplicated retirement. While perseverance is required to achieve your goals, it should be complemented by smart financial preparation.

After you retire, the regular working capital may cease, however the expenses will still not. In actuality, because of the need for healthcare, costs may climb in the future. You'll have to begin setting aside money to build a pension fund to pay these expenses. Unit Linked Insurance Plans (ULIPs) are indeed a popular way to save for retirement. ULIPs combine the benefits of both insurance and mutual funds into one package. The inherent nature of the product assists you in making arrangements for a happy retirement. To get to know about the way ULIP can be used for retirement planning, read on.

How Can A Person Use ULIPs For Retirement Planning?

Following are some of the ways to use ULIPs for retirement planning -

1. Switchability is possible using ULIP

Consider the case below. You started buying ULIPs whereas the share market was doing well. As a wise investor, you picked an equity-based fund. The stock market has crashed in recent years, but you'd rather put all your money towards a more stable debt alternative. What are your plans for the future? You can swap funds in ULIPs performance appraisals. The number of economic companies offer four free swaps each year. It enables you to move your funds around in order to attain the greatest outcomes.

2. Top Up And Riders

ULIPs opt to pay top-up premiums to participate in a higher-yielding portfolio if you have additional money. For a little cost, you may easily add the additional money to your existing plan. Top-up rates generally range from 1% to 3% of the entire premium, which is significantly less than the cost of a new policy.

When you are retired, people are your most stress-free. Your regular activities here should not be hampered by a lack of funds. ULIPs start taking care of while simultaneously permitting you to indulge in a few extravagances. As an investor, one can keep records of how the investment is doing or where it is placed. You will have online access to those materials.

3. A ULIP provides a higher rate of return on investment

Two points to consider whenever it comes to finances your hard-earned money: security and profits. ULIPs give both of these services. Bonds, endowment plans, FDs, pension plans, and other investment choices have much lower average returns than ULIPs. The large returns are attributable to the fact that perhaps the money being reinvested. You get the advantages of the equity market at a far decreased risk than that of the genuine equity market since of diversity and excellent investment advisors.

4. The Ability To Change The Premium Amount

Policyholders can choose to pay a single premium in whole just at the beginning of the insurance policy or pay in instalments over time. Regular premiums are pre-determined amounts that must be paid on a routine basis, such as yearly, semi-annually, quarterly, or monthly by the policyholder. Using ULIPs, you can pay a lump amount on top of the regular premium.


ULIPs are a one-of-a-kind product that corporations are launching to fulfil a range of buyer objectives. ULIPs are becoming more popular as part of people's retirement plans and life objectives. Have you explored looking into pension schemes further after acquiring a ULIP? While ULIPs can help with retirement planning, pension plans have their own set of advantages. Pension plans are important considering even if you already have a ULIP in place.

Also Read: Reasons To Invest In A Pension Plan

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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