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As building a robust retirement corpus is essential, one must start from a young age.
As building a robust retirement corpus is essential, one must start from a young age. There are multiple avenues available in the market that can help in generating wealth for a successful retired life, insurance being one of them. One can invest a lump sum amount in select life insurance schemes and get regular income throughout life.
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There are several senior citizen insurance schemes that offer a regular income post-retirement. Insurance companies also offer such types of plans at perusal. One such option is annuity or pension plans.
These are designed to assist the customer with a regular flow income during the post-retirement period, according to Naval Goel, chief executive officer and founder, PolicyX.
With these, users don’t have to keep paying the insurer at regular intervals. Only one time lump sum investment is required.
Anil Kumar Singh, chief actuarial officer, Aditya Birla Sun Life Insurance suggests people to either opt for a guaranteed return plan or a whole life insurance policy with unique benefits to ensure long-term financial stability.
"While, the former ensures assured pay-outs at desired intervals, the later stays active until 100 years of age," he explains.
"Such policies if planned properly can be used as a retirement corpus. People who aspire to retire early can also purchase these solutions in order to fulfill their financial dreams post retirement. Besides generating regular income, these also offer life cover providing holistic security to an individual’s financial future," he added.
Unit Linked Insurance Plans (ULIPs) which gives an additional benefit of market-linked returns along with protection, is also an ideal instrument for retirement goals.
One can choose the policy period of until retirement and pay the premium regularly to get the maturity benefit. Owing to the higher premiums, it is also easier to exhaust the deduction limit of Rs 1.5 lakh under Section 80C with ULIPs.
The maturity benefit is always tax-free unlike mutual funds, where capital gains from debt funds are taxable.