We work hard our entire lives so our loved ones can get access to the best possible resources and opportunities. As we near our retirement, we may want to use our time to achieve our goals and dreams. However, we must ensure that we have adequate financial support during these years. One of the best ways to make sure you have financial support during your golden years is by building a retirement plan for yourself.

Retirement plans help you prepare today for your future goals. You can set your retirement goals, calculate the amount you need and begin allocating funds appropriately to achieve your retirement goals. Several instruments help you prepare for your retirement planning. However, opting for a ULIP policy can be one of the best ways to do it.

What are ULIPs?

Unit-Linked Insurance Plans are insurance-cum-investment plans that offer the policyholder the benefit of insurance coverage and market-linked returns. With ULIP investments, your premium amount is split into two parts. The first part is kept for insurance coverage, and the second part is kept for investing in market-linked instruments. Many insurance companies in the country offer different features to help individuals purchase ULIPs. For instance, if you purchase the TATA AIA ULIP, you can use the ULIP calculator to purchase the most optimal plan for yourself.

Five reasons why ULIPs are optimal for your retirement years:

  • Helps in boosting wealth

ULIPs help the policyholder build their wealth through different instruments. You can gradually build wealth through different market-linked instruments. If you buy the policy at a younger age, it will help you get decent returns during your retirement years. The longer you stay invested in the ULIPs, the better your wealth will get in the future. These plans can help you reach your financial goals during your golden years without any issues.

  • Tax benefits

ULIP policies are optimal options to accumulate tax-free wealth. You can allocate funds based on your requirement and grow your financial corpus without the pressure of tax. Moreover, the premiums paid on the plan are eligible for tax deductions up to Rs. 1.5 lakh as per Section 80C of the Income Tax Act. ULIPs also provide tax benefits on both maturity and death benefits earned through the plan under Section 10 (10D) of the Act, subject to specific conditions.

  • Customizability option

ULIP plans provide policyholders with the ability to invest in multiple funds at the same time. The investment funds can be a mix of both debt and equity or either of the two. Moving your asset allocation from one fund to another will not affect the tax status of the investment. Policyholders can also adjust their asset allocation or even withdraw a percentage of the funds once the lock-in period is over. Policyholders can invest in equity funds during their younger years and shift to debt funds as they grow old. It can help them benefit from the high-risk nature of equity funds and secure their profits through the low-risk nature of debt funds.

  • Automated investment management

ULIPs are the only long-term investment plan that offers asset allocation strategies. These strategies help the policyholder benefit from the market opportunities, handle the risk in the portfolio and protect your wealth from market fluctuations. Investment management will help you worry less about your investments. Along with this, strategies like these can help long-term investors benefit exponentially.

  • Insurance coverage for your spouse

If the policyholder has a spouse they wish to protect, opting for ULIPs can be quite beneficial. In the event you pass away, your spouse’s retirement and wealth goals will also be hampered. However, with a ULIP, you can make sure that your spouse is well protected financially.

Thus, building a retirement plan in India is quite beneficial, as it can help us achieve our financial goals in the long run. Out of the several instruments available in the country, ULIPs are one of the best ways to do it. With ULIPs, you can protect your loved ones and build for your golden years effectively.