A Smart Retirement Planning Should Include a Life Insurance Product, here’s Why!

A life insurance plan can guarantee a steady stream of income during your retirement years. When an insurance plan matures, you could invest in an annuity and enjoy a steady income every month after your retirement.

An annuity is an instrument that collects a fixed sum regularly during its term and upon maturity pays a steady stream of payments to the investor from the amassed pool.

Insurance regulator requires capital protection as a fundamental part of any post-retirement solution. Insurance companies offer long-term solutions and guaranteed income plans that allow you to save systematically in a variety of equity and debt instruments.

Sanjay had told Ravi that one of his objectives for retirement planning was providing a comfortable life for his wife even if he was not around. Sanjay was aware that the death of an earning member could mean financial struggle for the surviving spouse and dependents, and he wanted to protect his wife from it.

Ravi explained “If you, god forbid, were to pass away during your retirement years, the payout from an insurance policy will benefit your surviving wife and dependents. So, you can rest in peace knowing that your wife isn’t left to fend for her survival or struggle to make ends meet.”

When you turn 50 and wish to boost your retirement plan a life insurance policy could be a prudent measure. Since you already have a term life policy, you can also pick a top-up plan, with a lower premium instead of a fresh cover. That way you won’t feel the pinch.

Depending on the type of life insurance, it can also serve as a safe asset lending to diversification in a portfolio.

Ravi elaborated on the role of life insurance in portfolio diversification, “The performance, in terms of price movement, of various products in a portfolio is either in the same direction or opposite. A well-diversified portfolio leverages this correlation dynamics to reduce risk and increases the overall return of the portfolio. In case of assets that perform differently, the gain of one absorbs or offsets the losses on another. Investing in a balanced fund such as life insurance can assure a secured growth of your retirement corpus.”

Sanjay was convinced that a life insurance plan could boost a retirement plan. He asked Ravi to recommend life insurance products, not in his portfolio but being offered in the marketplace. Sanjay wanted to leave no stone unturned when creating a well-diversified portfolio of investment instruments. He was confident that Ravi would look out for him and adjust his portfolio mix to a more conservative type as he got closer to retirement age.

Ravi’s closing remark was quite astute, “Whether you start saving early or late, there are retirement and pension plans to help you make the most of the time you have before retiring. At the end of the day, awareness while choosing your insurance plan will go a long way in reaping considerable benefits in the years to come.”

THE LINKED INSURANCE PRODUCTS DO NOT OFFER ANY LIQUIDITY DURING THE FIRST FIVE YEARS OF THE CONTRACT. THE POLICYHOLDER WILL NOT BE ABLE TO SURRENDER/WITHDRAW THE MONIES INVESTED IN LINKED INSURANCE PRODUCTS COMPLETELY OR PARTIALLY TILL THE END OF FIFTH YEAR.

Unit Linked Insurance Products (ULIPs) are different from the traditional insurance products and are subject to the risk factors. The premium paid in the Unit Linked Life Insurance Policies is subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. Max Life Insurance is only the name of the insurance company and Forever Young Pension Plan(UIN: 104L075V02)is only the name of the unit linked life insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges from your Insurance agent or the Intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these funds, their future prospects or returns.For more details on risk factors, terms and conditions please read prospectus carefully before concluding a sale. Past performance of the funds does not indicate the future performance of the funds. You may be entitled to certain applicable tax benefits on your premiums and policy benefits. Please note all the tax benefits are subject to tax laws prevailing at the time of payment of premium or receipt of benefits by you. Tax benefits are subject to changes in tax laws.