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Sunday 20 September 2020
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How life insurance can help you in retirement planning

How life insurance can help you in retirement planning

Everyone needs financial security in their own age. When it comes to retirement, having a financial corpus that one can rely on becomes not just a source of comfort but also dignity. One of the crucial aspects of retirement planning is to start as early in life as you can. One might put off retirement planning till they are older or when they actually retire. However, that is not the right way to go about it and can lead to many financial difficulties due to the lack of planning.

A key element of retirement planning is availing life insurance. Life insurance allows you to save wisely and provides long-term returns. Financial experts recommend life insurance to be an important part of your financial planning. Not only does life insurance help you in your retirement, but it also helps your family and provides security coverage to them in case of an unfortunate event. So it is not just for your personal retirement planning, but also for your family after you retire.

For successful retirement planning, you must start early on in your career to ensure that you can plan adequately. Your 20s and 30s are a good time to start planning for your retirement. This is because your money needs time to grow and it does not happen overnight. Start planning for your retirement through life insurance policies. There are many types of life insurance policies that you can opt for. Moreover, you can avail benefits from any number of insurance policies. You can opt for the ones you like best, and spread your risks to avail all features of life insurance policies.

If you wish to get returns without any risk, then you can go for endowment plans. With endowment plans, the insured receives a certain lump-sum amount after the maturity period or in case of the death of the policyholder. It is an opportunity for long-term saving for retirement, because if you as the policyholder live past the maturity period, you will avail the maturity benefits that will help with the long term retirement goals. On the other hand, if you would like returns associated with the market, then you can opt for Unit-Linked Insurance Plans (ULIPs). Unit-Linked Insurance Plans offers both investment and insurance benefits for retirement. In a ULIP, one part of the premium is utilized in getting a life cover, whereas the other part is put forth in investments in capital markets. If you invest in ULIPs for a long duration, such as 15-20 years, then it provides opportunity for a solid retirement security cover.

Additionally, you can also consider actual retirement plans and whole-life plans. When it comes to retirement plans, you have to pay premiums during the policy tenure, which is known as the accumulation phase. Once you reach the retirement age, you begin to get regular returns, which can even be monthly. This ensures a regular cash flow after retirement to take care of your needs. Under whole-life policies, you as the insured are covered for your whole life, till 100 years. In the event of death, the nominee receives the sum assured along with a bonus, if any.

Therefore, life insurance can help you in your retirement planning and must be included in your long-term financial goals. Do not wait until you are fifty and older to start thinking about retirement plans. You need to plan from the initial years of your career to enable your money to grow, your life insurance policies to mature and form a retirement corpus amount by the time you actually retire. Life insurance policies form a solid base to support and uphold you during the elderly years, and ensure that you live a life of dignity and security that you deserve.