5 Reasons Why ULIP Plans Are the Best for Retirement Planning
Close
Close

Buy a life insurance plan in a few clicks

Now you can buy life insurance plans completely online right here.

  • Icon for Kotak Preferred e-Term Plan

    Kotak e-Term Plan

    Kotak e-Term Plan is a pure term plan that provides a high level of protection to your loved ones in your absence.

  • Kotak E-Invest Plan

    Kotak e-Invest is a comprehensive Unit Linked Life Insurance Plan that can be customized as per your goals and needs - be it protection; investment; financial security for child or retirement planning.

  • Icon for Kotak Guaranteed Savings Plan

    Kotak Guaranteed Savings Plan

    Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and insurance cover against any eventuality.

  • Icon for Kotak Preferred e-Term Plan

    Kotak Lifetime Income Plan

    Kotak Lifetime Income Plan gives you the assurance of your income continuing throughout your life and in your absence throughout the lifetime of your spouse!

  • Icon for Kotak Preferred e-Term Plan

    Kotak Health Shield

    The Kotak Health Shield Plan helps secure your finances in times of sudden medical expenses related to illness such as Cardiac, Liver, Neuro and Cancer (all early and major stages of illness /conditions of Cancer); along with offering protection for Personal Accident - in case of accidental death or disability.

Close

Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

Back

5 Reasons Why ULIP Plans are One of The Best Retirement Planning Instruments

View Plans
  • 27th Aug 2021
  • 273

5 Reasons Why ULIP Plans are One of The Best Retirement Planning Instruments

Summary

A ULIP is an insurance policy where the insured’s money is invested in one or more funds of the insurer as per his/her choice and risk appetite. ULIPs are regulated by the Insurance regulatory and development authority of India (IRDAI). The ULIPs stand apart from the other retirement planning instruments over the following points

1. The Double Benefit of Investment and Insurance

They bring you the benefits of a mutual fund and a traditional insurance policy in a single plan.

  • One portion of the premium amount paid by the insured person goes to the investment, and the other portion goes to the insurance corpus. Thus, the portfolio of the insured person has exposure to both profiles.
  • The policyholder has the choice to decide the percentage of allocation of funds. For example, based on your risk appetite, you can choose to allocate 70% of the fund to equities, 20% to money market instruments and 10% to debt instruments or vice-versa.

2. Greater Flexibility

They offer a great deal of flexibility when it comes to

  • Investment amount: The insured person can increase or decrease the investment amount according to his/her prevailing financial conditions. This can be done by increasing or reducing the SIP (Systematic investment plan) amount. For example,you can start with an initial monthly premium of Rs 5000. On getting a raise in your salary, you may consider increasing your monthly premium to Rs 7000 without any hassle.
  • Changing Funds: With ULIPs, you can change the fund as per your age and risk-taking ability. For example, if you are below the age of 40, you can choose to put your money in high-volatile funds, and with growing age, you may want to shift to a lower volatile fund. You can also opt for automatic switching of funds where the funds can be switched on your behalf based on your selected preferences when buying the policy. Kotak Ace Investment plan allows the policyholders to choose from seven different funds based upon their risk-return profile.
  • Death Benefits and Additional Riders: They can provide death benefits to the nominee in case of the untimely demise of the policyholder. They can also provide additional riders like accidental death and permanent disability cover.
  • 3. Transparency in Information

    ULIPs are very transparent and easy to understand for investors. The charges and benefits are well illustrated in the information brochure. Furthermore, anyone can track the NAV (Net Access Value) of the plan to analyse its performance. NAV is updated daily.

    4. Tax Benefits

    A ULIP pension plan offer tax relief not only on the premium paid but also on the return on maturity. The premium paid is eligible for deduction under section 80C, and the return on maturity is eligible for deduction under section 10(10D) of the Income-tax Act.

    5. Potential to Earn a Higher Rate of Return

    The interest rate on bank fixed deposits and traditional non-participating pension plans has reduced in the last two decades. On the contrary, a ULIP retirement plan has the potential to deliver a higher rate of interest when invested for a long duration. It can be a great way of compounding your wealth.

    With the Indian economy booming, the equity market here is promising. Despite the ongoing pandemic and economic challenges, the Indian equity market is still thriving and looks promising. Thus, it can be a wise decision to give your retirement planning the proper exposure to ULIPs. It pays to start early.

- A Consumer Education Initiative series by Kotak Life

Also read

  • At What Age Should You Start Your Retirement Planning?

    The 30s or as early as you start a job are the ideal age to begin investing in a retirement plan to avail the benefits of compounding interest and cre...

    Read more
    • 26th Nov 2021
    • 203

    How To Make Most of Your Money After Retirement?

    As you are nearing your retirement, you may need some changes in your life. Your retirement will be far smoother if you can manage your money after re...

    Read more
    • 28th Mar 2022
    • 103

    What are the Maturity Benefits in a ULIP Plan: Fund Value Sum Assured or Only Fund Value?

    A maturity benefit of ULIP is the amount offered by the insurer to the policyholder if the policyholder survives beyond the maturity period of the pol...

    Read more

Related Plans

  • Kotak Credit Term Group Plan

    Kotak Credit Term Group Plan

    Kotak Credit Term Group Plan provides life cover to a group of borrowers of credit institutions where the life assured is the borrower and the credit ...

    Know more
  • Kotak e-Term Plan

    Kotak e-Term Plan

    Get protected at less than Rs.19/day with Kotak e-Term Plan. Our term insurance plan combines best-in-class features & comprehensive coverage with...

    Know more
  • Kotak e-Term Plan

    Kotak e-Term Plan

    Kotak e-Term Plan is a pure term insurance plan that provides a holistic life protection at affordable prices. Find out the eligibility criteria, key ...

    Know more
  • Kotak e-Invest

    Kotak e-Invest

    Kotak e-Invest - a comprehensive Unit Linked Life Insurance Plan that can be customized as per your goals and requirements.

    Know more