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Is Investing in a ULIP Plan a Good Way to Plan for Retirement?

Investing in a ULIP Plan


ULIP plan offers the dual benefit of insurance and investment. This way you can protect your loved ones in case of an untimely death while fulfilling your dreams and goals. The policyholder will receive the maturity amount of their ULIP policy if they live through the tenure. A reputed insurance company will offer multiple unit-linked funds to choose from. You can pick the one based on your risk appetite, lifestyle type and financial needs. Let us look at why ULIP plan is an ideal way to plan for your golden years.

Tax Benefits

You accruetax deductions on the sum assured every year under section 80C of the Income Tax Act. This is allowed for up to a maximum of ₹1.5 lakhs. You may also claim tax benefits on the premiums paid, annually. This helps save towards various needs which is critical during your retirement days to maintain your lifestyle.

Growth Potential

ULIPs generally have a 5-years lock-in period. This is useful since your money gets enough time to grow. You can stay invested for even longer in equity and debt funds through ULIP to enhance the chances of growth. This can be useful to support your child’s education, plan an international trip, buy a house or be prepared for medical emergencies.

Partial Withdrawal

You can withdraw a part of the money after the 5th-year lock-in period is over. This is extremely helpful for requirements like treatment or repaying a debt within its deadline. The amount is free of taxunder Section 10 (10D) of the Income Tax Act, 1961. Make sure you are 18 years of age to exercise this facility since minors have to wait to become an adult.


Dual benefits in a single package eliminate the need for a separate investment and insurance plan for your retirement. Further, a good life insurance company will allow you to manage and control your investment via premium redirection, top-up and fund-switch. Buying a ULIP plan online makes these processes all the more hassle-free. You do not have to step out of your home and can carry out these activities from the comfort of your space. This helps save plenty of time and headaches and lets you enjoy your retirement better.

Disciplined Savings

ULIPs can put you into a habit of continuous savings with premiums. This is quite beneficial for your retirement planning since you are building a sufficient corpus. You are less likely to procrastinate savings which can have a positive impact later in life. For instance, there are fewer chances that you have to depend on your children or siblings for your monetary needs.

ULIPs can ensure a well-thought-out insurance and savings plan. It helps to meet most of your financial commitments without hiccups. It is a good idea to work with a reputed life insurance company that offers multiple ULIP plans. Read the key benefits, features and terms and conditions of each one and compare well to be able to make an informed choice.

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