Life insurance forms a very important part of financial planning, it can help us in every affair of life whether early death or living too long, in this article we will try to explain how we can use insurance to make our golden years truly golden!!
Retirement needs can be classified into two segments, Basic need & lifestyle expenses. Basic need includes day to day expenses like Groceries, health & medicine, clothing, etc. while lifestyle expenses may include tour & traveling, gift, refurbishing of home & other occasional expenses.
Basic needs are those requirements which must be fulfilled in any case and for these needs, we can’t depend on market conditions. So, for basic need, we should make a plan which has a safety & guarantee of returns. Non-ULIP pension plans can be taken to cater to basic needs; additionally, a med-claim policy should be taken which will take care of higher expenses of healthcare & other medical expenses in old age.
For Lifestyle expenses, Unit-linked pension plan can be taken. These plans have an equity component, which enables them to beat inflation & outperform other investment avenues. These products can take care of increasing cost of lifestyle & other occasional requirements.
Now, the Million dollar question is how to implement this? Take professional help to analyze your basic & lifestyle need, then invest your fund (which you can invest for your retirement) into Non-ULIP & ULIP retirement plans as per your need, choose a plan according to your situation & start as early as possible
In short, instead of going for a tailor-made plan to assess your retirement need, segregate them into the basic & lifestyle and buy products which are best suited to satisfy them.
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