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How Can ULIPs Help You Plan For Retirement?

Updated On May 25, 2021

Retirement is one of the key events in life after which there is a requirement of regular income to bear normal expenses. Saving for such important events is very necessary, ULIPs provide various benefits that help an individual to save for the declining years. Some of the benefits are given below.

Reasons Why ULIPs Are An Ideal Investment Choice For Retirement Planning

Following are the reasons for which you can consider ULIPs for planning for your retirement -

  • Higher Returns

When an individual invests their hard-earned money, there are two basic things i.e  security and returns. ULIPs aims at providing both. The average returns receivable in ULIPs are comparatively higher than other investment options like bonds, endowment/savings plans, pension plans, FDs, etc. ULIPs have such high returns because of the presence of the equity market, an individual can earn returns in the equity market as per their risk appetite. In ULIPs,  you get the benefits of the equity market without experiencing intense volatility of the market because of various features like systematic transfer option, and dynamic fund allocation, etc. 

  • Wide Selection of Options

As different individuals have varying risk appetite. ULIPs provide customised investment options to the policyholder. Basically, ULIPs provide 3 three categories to the investors to invest their funds in- 

  • Equity funds priorly investing in equity related funds.
  • Debt funds which invests in bonds, government securities, etc.
  • Balance fund is a combination of equity and debt funds. 

The policyholder has the full liberty to invest in numerous fund options provided by the insurance company in the choice of their own proportion. Investors can choose the appropriate fund options according to their investment avenues and risk appetite to match their life goals. During old age, ULIPs provide a feature where the company automatically transfers your funds from equity related funds to debt related funds to avoid any risk taking and maintain stable income.

You may also like to read:- Need For ULIPs During Coronavirus Outbreak  

  • Fund Switching Facility 

With ULIPs, you have the option to switch your fund options any time during the policy term. You can also choose to redirect your premium in the proportion of your choice via premium redirection option. After the retirement your risk appetite changes, you prefer more stable returns with less risk. If you still desire high returns you can go for equity funds. 

  • Top-up and Riders

If you have surplus savings to invest in a fund with superior return, ULIPs provide you the facility to invest that surplus via top up premiums option. You can put the extra fund in your existing plan without any high charges. The charges for top up premiums usually vary between 1% - 3% which is comparatively lower than purchasing a fresh policy.

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Also Read:- Do ULIPs Really Provide Good Returns?


The retired life is supposed to be the one where you are ideally stress-free. During this time,  you should not be worried about money for your daily expenses. ULIPs can cover those expenses and also provide enough to live a leisure life. An investor can monitor how their money is performing and where it is invested. All the necessary information is usually available on the company website. 

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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