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How ULIPs can help plan for your Retirement?

The picture of the ideal retired life may be different from one person to another. For someone, it may be a slow and relaxed life in the countryside, while for another person, it may mean traveling the world. And for yet another individual, it may mean being surrounded by friends and family and pursuing all the hobbies that they did not have time for in their youth.

Investment plans also act as tax-planning tools, as many avenues help reduce tax liability. There are different types of investment plans, and by choosing the right one, you can invest according to your needs and grow your savings.Read Less

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Written ByPalak Bagadia
AboutPalak Bagadia
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Palak Bagadia, Associate – Digital Marketing at Bajaj Allianz Life, with experience spanning content and performance marketing, recruitment, employee engagement in the BFSI industry.
Reviewed ByRituraj Singh
AboutRituraj Singh
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Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.
Written on: 7th July 2024
Modified on: 7th July 2024
Reading Time: 15 Mins

But whatever the ideal retirement may look like to you, there is no denying that it involves having financial security, so you can pursue all the dreams you want to in your golden years. When used well, a Unit Linked Insurance Policy can help you plan for your retirement years. Want to know how? Let’s get started by decoding ‘What is a ULIP?’


What is a ULIP?


A ULIP policy or a Unit Linked Insurance Plan is a kind of investment vehicle that gives you the dual advantage of insurance and investment. When you invest in a ULIP policy, you not only get a life cover that protects your loved ones financially in case something happens to you, but you also get the opportunity to create long-term wealth through market-linked investments.

You can choose to invest in equity funds, debt funds or a mix of both under your ULIP policy. If you are unsure of the amount you should invest, you can make use of a ULIP Calculator to compute the amount of investment needed to meet your financial goals.


How ULIPs can help plan for your Retirement?


ULIPs have many features that can be useful in your retirement planning. Let us see how you can use these insurance policies to secure your life after retirement.


• ULIPs allow you to save up in a disciplined manner


Unit Linked Insurance Plans have a lock-in period of 5 years. So, you can use this feature to your advantage to save up in a disciplined manner over this period. The periodic premiums that you pay for your Unit Linked Insurance Plan encourage you to invest consistently in the funds of your choice. And as you well know by now, the key to saving up for your long-term goals is to be disciplined in your investments over the years. ULIPs allow you to develop this habit of investing smartly and on a consistent basis.


• ULIPs helps to enable wealth creation through market-linked investments


ULIPs also give you the option to invest in market-linked investments like equity. Although these investments may carry a higher risk, they can also come with the potential to earn inflation beating returns over the long term. Additionally, may also help you in tiding over market volatilities by remaining invested for a longer period. And by investing regularly, you also need not time the market. Over time, this can help you with your wealth creation goals and may leave with enough financial security for life after retirement.


• ULIPs allow you to diversify your investments as per your life goals


Your life goals should be the foundation for your investment plans. And if you are planning to save up for retirement, your Unit Linked Insurance Plan can help you diversify your investments according to this goal. For example, when you are in your 20s and 30s, there are still several years to go until your retirement. So, you can afford to take on higher risks and invest in equity funds via your ULIP. However, as you grow older and your retirement approaches, you can diversify your portfolio to include debt funds with the fund switching option in ULIPs.


• Some ULIPs also offer the benefit of additional income


Some Unit Linked Insurance Plans give you the option to receive regular payouts after a particular period, with the balance corpus continuing to remain invested and earning returns. You can make use of this option to replace your primary income in your post-retirement life. This way, you can continue to live a comfortable life without compromising on your standard of living.




Thanks to the features and benefits outlined above, Unit Linked Insurance Plans help you save up for your retirement life early on. You can make use of these benefits to plan for your golden years using a ULIP policy. Remember to factor all your needs into your retirement plan before you start investing, so you are adequately covered.


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The above information is for general understanding and is meant to educate the general public at large. The reader will have to verify the facts, law and content with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information.

In this policy, the investment risk in investment portfolio is borne by the policyholder. Investment in ULIPs is subject to risks associated with the capital markets. The policy holder is solely responsible for his/her decisions while investing in ULIPs. The views stated in this article is not to be construed as investment advice and readers are suggested to seek independent financial advice before making any investment decisions. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on carefully before concluding a sale.


*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

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%%Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,238. 2nd Year onwards premium is Rs. 6,659. Total Premium Paid is Rs. 1,99,349 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. This is inclusive of all the discounts mentioned above.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

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