Life insurance coverage is a perfect long-term retirement planning instrument that gives you a pool of advantages equivalent to stability, safety and assured revenue throughout your ‘second innings’ – retirement. Folks with a better threat urge for food can put money into market-linked insurance coverage (Ulips). By investing in market-linked merchandise, it can save you within the incomes section whereas it grows and withdraw within the retirement section.

Annuity plans
Then there are annuity plans obtainable for the purchasers that additionally fall underneath the life insurance coverage class and are immensely widespread amongst individuals planning their retirement. Underneath any annuity plan, you make investments a lump sum quantity along with your life insurer and in return, you obtain revenue for all times. The largest benefit of annuity plans is that you may lock-in the speed of curiosity on your whole life with out worrying concerning the falling fee of curiosity on financial institution mounted deposits. There are a number of forms of pensions obtainable like life annuity, joint-life annuity and an annuity with return of premium possibility to select from.

For people who find themselves searching for secured and assured make investments choices, there are assured return plans. These plans can help you lock within the rate of interest for not simply 5 or 10 years however for so long as you reside. The premium quantity you pay in the direction of these plans is exempted from tax underneath Part 80C together with the maturity quantity underneath Part 10(10D).

Time period plans
Time period insurance coverage also can allow you to to plan your retirement, as there are totally different variants obtainable available in the market. The entire life time period insurance coverage cowl you on your whole life. Underneath these plans, you proceed to pay premiums on your life and upon your demise; your dependents will obtain your complete sum assured as a lump sum. These plans are meant for individuals who consider in legacy planning and want to depart wealth for his or her authorized heirs.

The second variant is time period plans with return of premium the place your complete premiums of the plan are returned to the client at finish of the coverage time period. If the policyholder survives the policy-term, the premiums paid are returned again and this quantity can be utilized for taking good care of the bills in the course of the retirement section. As well as, the sum assured underneath each these variants is tax-free.

The author is CBO, Life Insurance coverage, Policybazaar.com