Can Life Insurance Help Me Plan My Dream Retirement?

1. Can Life Insurance Help Me Plan My Dream Retirement? What do you plan to do after your retirement? Do you want to travel, pursue a hobby, or move into the quiet suburbs for a tension-free life? There may be a vague picture in your mind or a distant dream. But the vague picture becomes clearer and more achievable if you plan well. Annuity, pension plans, mutual funds, fixed deposits, property, gold and stocks – there are various kinds of investments, which can create a financial cushion for you during your golden years. All of them have their advantages and risk factors. However, did you know you can also consider various types of insurance plans as a worthy option as these are capable to generate a considerable retirement amount for you? Besides, with an insurance plan, you also get a life cover that will support your loved ones financially, in case of your unfortunate death. A good savings insurance plan and Unit Linked Insurance Plans (ULIPs) are two essential investments that can help you create a retirement corpus. As is true for any life insurance product, ask yourself the following questions before buying these policies:- 1. How much money do I require to support my retirement? The answer to this question is determined by how much money you are earning currently, the years left to your retirement, and the number of dependents you have. Once you have considered all these factors, you need to calculate the money that you need to maintain the same lifestyle post-retirement. Here is a simple calculator to do the entire math.

2. 2. What is my risk appetite? Both savings insurance plans and ULIPs are significantly different in terms of their risk quotient and the returns they give. Let look at each of them: Savings insurance plan: A savings insurance plan is a savings instrument that offers you tax-free guaranteed savings along with a life cover. Like a fixed deposit your investment in a savings insurance plan remains risk-free. Even though, the returns are lower as compared to a ULIP, a savings insurance plan allows you to save every month for a desired goal, and retirement is certainly one of them. You can opt for Aegon Life’s iGuarantee Max Savings Plan, which has a host of benefits for you, such as affordable premiums as low as ₹500, and guaranteed tax-free returns. It is an ideal plan to aid retirement. Here’s how it can work for you: if you are 40 and want to save ₹5,000 every month for the next 10 years, you can choose to get your returns after 20 years, when you are 60. With iGuarantee Max Savings Plan you will get a guaranteed return of ₹14.69 lakh, tax-free just in time for your retirement. This will help in creating beefing up your financial cushion. ULIP: Unlike a savings plan where the goal is guaranteed savings. The goal of a ULIP is to build wealth by participating in market-linked instruments. Part of your insurance premiums go towards insurance coverage while the other part is invested in stock market related instruments like (equities, bonds or both) as per your choice and risk appetite. ULIPs can provide a significantly higher return based on the investment strategy you have opted for. For instance, Aegon Life’s iMaximize Plan, gives you the freedom to choose six fund options, including the ‘Opportunity Fund’. It is a five-star-rated fund that has performed consistently over the years and has been listed as 'Best ULIPs plan to look forward to in 2023' by Forbes Advisor & 'Top Performing ULIPs' by Moneycontrol respectively. If you have some disposable income, and an appetite for risk, you can check out our ULIPs here and start planning that dream retirement.