5 Reasons Why ULIPS are the Best Retirement Planning Instruments

5 Reasons Why ULIPS are the Best Retirement Planning Instruments

A Unit-Linked Insurance Plan or ULIP plan is an investment that offers dual advantages. It provides the benefits of investment and insurance. In a ULIP plan, part of your paid premium is offered as insurance coverage, and the remaining is invested in a hybrid fund, equity, or debt of your liking. A ULIP plan is known to meet immediate financial goals and be the ideal instrument to save funds for retirement.

5 Reasons Why ULIPs are Great for Retirement Planning

Here are 5 reasons to choose ULIPs for your retirement planning:

  • Goal-based planning – ULIPs are goal-based investment plans that are beneficial only if you have a minimum of ten years of investment scheme. Therefore, ULIPs are comprehensive life insurance plans for people who look for long-term investment goals. They make excellent retirement planning instruments because:
  • They come with a five-year lock-in period where you pay regular premiums.
  • They are flexible and customisable.
  • Avail market-linked returns with ULIP Plans – If you begin planning for your retirement early in life, you have a long-term horizon in mind. Long-term goals and an appetite to take risks to make ULIPs one of the ideal options for you.

ULIP plans are market-linked funds that let you invest in low-risk equity funds. In the long term, equity investments generate higher funds than other assets. Therefore, with ULIP plans, you can have a significantly larger retirement fund than traditional pensions.

  • Enjoy the benefits of insurance cover – ULIP retirement plan offers comprehensive life insurance coverage and safeguards the future of your dependents. Usually, a ULIP plan would provide you with a minimum of ten times your premium coverage as a life cover.

Moreover, you enjoy the flexibility to select the amount of your life coverage based on your chosen policy. The ULIP pension plan ensures that your dependents are taken care of if and when you are not around.

  • Type I ULIP – As the policyholder’s benefit, the beneficiary gets either the fund value or the sum assured, whichever is of higher value.
  • Type II ULIP – The beneficiary gets the fund value and the sum assured.
  • Flexibility – ULIPs allow you to invest with flexibility. You can invest in debt, equity, or a combination of them. This means that ULIPs are customisable and flexible. They provide several combinations and permutations of debt and equity funds.

If you have an excellent risk appetite, you can invest a considerable amount of your funds into equity. If otherwise, you can choose to invest in different debt instruments. Based on your preferences, you can customise your plan.

Furthermore, you can also switch between funds. If you started investing in equity funds and wish to change to debt instruments, ULIPs give you the provision. This flexibility is excellent for a long-term investment as you get to control to plan for your retirement. For example, you can check out Tata AIA life insurance offers you ULIP plans that would not just secure your future but also make the process seamless.

  • Tax Benefits – The best ULIP plan for retirementcomes with tax relief on the paid premiums. They also offer tax benefits on the return value at maturity.
  • Paid premium is eligible for deduction under section 80C.
  • The maturity return amount is eligible for deduction under section 10(10D).


Finally, you have the reasons to consider investing in a ULIP plan as a retirement goal. For a seamless experience, you can buy ULIP online from the comfort of your house with merely a few clicks. Investing with a trusted insurer is needed for a hassle-free experience for a lifetime.