Retirement
ULIP
2024-05-14 3 Min read
0
Planning for your retirement in the right way can help you secure a future of financial freedom. The right financial planning allows you to enjoy the sweet fruits of labour. When you save for your retirement, you can enjoy your life’s second innings without having to compromise on comforts and necessities. If you are looking for a policy that can offer you multiple benefits, then unit linked insurance plans are indeed a worthy option to consider.
How can SUD e-Wealth Royale ULIP help secure retirement corpus?
With the dual benefits of investment and insurance, the right ULIP has the potential to safeguard you and your loved ones against unforeseen events. The market-linked returns give you the chance to sustain your lifestyle and support your desired endeavours even during retirement. With the market brimming with ULIPs, SUD e-Wealth Royale is one of the best ULIP policies in India. Read on to understand how regular and responsible saving can empower you in your retired life. Investing correctly helps you maintain control over your retired life, you can make choices that are aligned with your personal aspirations. Here’s how.
1.Enjoy the dual benefits of insurance and investing
ULIPs are two-fold investment plans. Along with investment, the plan also offers life insurance coverage for as long as the policy term. So, on the one hand, you can plan out your long-term future financial goals, and on the other hand, you have peace of mind in life insurance coverage. Nearing retirement, these two investment ideas are usually the primary focus of an individual.
2.The power of compounding
With SUD e-Wealth Royale, you can master the power of compounding in ULIPs. It is a feature that allows your funds to grow at a remarkable rate. ULIPs offer compound interest, which means you get interest on the net investment (principal amount + interests earned so far) and not just on the principal investment.
3.Investing for a longer term can bring out the best in your ULIP
ULIPs are ideally meant to be a long-term investment. The plan has a lock-in period of 5 years, after which you have the freedom to make partial withdrawals. However, it is best to stay invested for 10-15 years to get the best returns. Since one part of the premium is invested in market funds, the performance of the same for years brings stability in returns with higher chances of profit.
4.Loyalty additions – an added advantage
SUD e-Wealth Royale offers an added perk with ULIPs. The loyalty addition is the bonus feature offered to consistent investors. From the 6th year of the ULIP, an extra unit is allocated in the policy as a reward. The unit consists of 0.10% of the average fund value of the past 12 months. To get the benefit of loyalty additions, you must refrain from delayed premium payments. Termination of the policy may cause you to lose your bonuses.
5.Invest as per your risk appetite
Retirement is a time when you can sit, relax, and fulfil your cherished financial goals. However, the smart idea is to also invest a chunk of these funds in your preferred plans like a ULIP. With ULIPs, you have the option to invest in three types of funds- debt, equity, and balanced, each with its own risk profile. So, risk assessment is a must prior to investing in ULIPs:
● Equity funds:
Equity funds are volatile and highly market-influenced. With high returns, it also brings higher risk to the table.
● Debt funds:
Compared to equity, debt funds are less risky. So, the return rate is also low compared to equity. It is considered a more secure option
● Mixed funds:
You can create a portfolio and invest some amount in debt and some in equity. It can be a balancing deal between the two options.
6.Switch between funds
Since ULIP returns are influenced by market funds, there is a probability of fluctuating returns. However, you need not panic in such a situation as you have the option of fund switching.
If your invested fund is not performing as per your expectations or some other fund looks more promising, you can switch between them. However, remember that there is a limit to free switches. Once your 12 free fund switches exhaust, you will be charged ₹100 per switch. Another unique feature of fund switching is that it is absolutely tax-free!
7.Make the most of tax benefits
Tax benefits are a part of ULIPs, like various other insurance plans. Recently, the government of India has introduced some changes in new taxation rules for ULIPs purchased after 1st February 2021. Earlier, both death and maturity benefits were tax-free. However, depending on your policy, the benefits may differ:
● Section 80C of the Income Tax Act of 1961
Under Section 80C, ULIP investors can avail a tax deduction of up to ₹1.5 lakhs on the payment of premium
● Section 10(10D) of the Income Tax Act of 1961
Under Section 10(10D), the death benefit of ULIP is tax-free. In case of maturity benefit, if the total ULIP premium payment exceeds ₹2.5 lakh (including all your ULIPs), the maturity benefit will be taxable at 10%.
8.Enjoy the safety of liquidity
Being a ULIP, e-Wealth Royale gives you the freedom of liquidity. In case of an emergency, you can make partial withdrawals to meet financial emergencies. However, there are certain partial withdrawal rules that you must adhere to:
● Partial withdrawal is only permitted after the end of the lock-in period of 5 years. This means you can withdraw from the 6th policy year
● The minimum partial withdrawal amount is ₹5000, and the maximum amount has to be less than 105% of the total premium paid so far
● The first four partial withdrawals are not chargeable. From the 5th withdrawal, a fee of ₹100 is charged/withdrawal
● During the death benefit settlement period, partial withdrawal is not permitted
● Until the life assured turns 18, a partial withdrawal is not allowed.
1.Enjoy the dual benefits of insurance and investing
ULIPs are two-fold investment plans. Along with investment, the plan also offers life insurance coverage for as long as the policy term. So, on the one hand, you can plan out your long-term future financial goals, and on the other hand, you have peace of mind in life insurance coverage. Nearing retirement, these two investment ideas are usually the primary focus of an individual.
2.The power of compounding
With SUD e-Wealth Royale, you can master the power of compounding in ULIPs. It is a feature that allows your funds to grow at a remarkable rate. ULIPs offer compound interest, which means you get interest on the net investment (principal amount + interests earned so far) and not just on the principal investment.
3.Investing for a longer term can bring out the best in your ULIP
ULIPs are ideally meant to be a long-term investment. The plan has a lock-in period of 5 years, after which you have the freedom to make partial withdrawals. However, it is best to stay invested for 10-15 years to get the best returns. Since one part of the premium is invested in market funds, the performance of the same for years brings stability in returns with higher chances of profit.
4.Loyalty additions – an added advantage
SUD e-Wealth Royale offers an added perk with ULIPs. The loyalty addition is the bonus feature offered to consistent investors. From the 6th year of the ULIP, an extra unit is allocated in the policy as a reward. The unit consists of 0.10% of the average fund value of the past 12 months. To get the benefit of loyalty additions, you must refrain from delayed premium payments. Termination of the policy may cause you to lose your bonuses.
5.Invest as per your risk appetite
Retirement is a time when you can sit, relax, and fulfil your cherished financial goals. However, the smart idea is to also invest a chunk of these funds in your preferred plans like a ULIP. With ULIPs, you have the option to invest in three types of funds- debt, equity, and balanced, each with its own risk profile. So, risk assessment is a must prior to investing in ULIPs:
● Equity funds:
Equity funds are volatile and highly market-influenced. With high returns, it also brings higher risk to the table.
● Debt funds:
Compared to equity, debt funds are less risky. So, the return rate is also low compared to equity. It is considered a more secure option
● Mixed funds:
You can create a portfolio and invest some amount in debt and some in equity. It can be a balancing deal between the two options.
6.Switch between funds
Since ULIP returns are influenced by market funds, there is a probability of fluctuating returns. However, you need not panic in such a situation as you have the option of fund switching.
If your invested fund is not performing as per your expectations or some other fund looks more promising, you can switch between them. However, remember that there is a limit to free switches. Once your 12 free fund switches exhaust, you will be charged ₹100 per switch. Another unique feature of fund switching is that it is absolutely tax-free!
7.Make the most of tax benefits
Tax benefits are a part of ULIPs, like various other insurance plans. Recently, the government of India has introduced some changes in new taxation rules for ULIPs purchased after 1st February 2021. Earlier, both death and maturity benefits were tax-free. However, depending on your policy, the benefits may differ:
● Section 80C of the Income Tax Act of 1961
Under Section 80C, ULIP investors can avail a tax deduction of up to ₹1.5 lakhs on the payment of premium
● Section 10(10D) of the Income Tax Act of 1961
Under Section 10(10D), the death benefit of ULIP is tax-free. In case of maturity benefit, if the total ULIP premium payment exceeds ₹2.5 lakh (including all your ULIPs), the maturity benefit will be taxable at 10%.
8.Enjoy the safety of liquidity
Being a ULIP, e-Wealth Royale gives you the freedom of liquidity. In case of an emergency, you can make partial withdrawals to meet financial emergencies. However, there are certain partial withdrawal rules that you must adhere to:
● Partial withdrawal is only permitted after the end of the lock-in period of 5 years. This means you can withdraw from the 6th policy year
● The minimum partial withdrawal amount is ₹5000, and the maximum amount has to be less than 105% of the total premium paid so far
● The first four partial withdrawals are not chargeable. From the 5th withdrawal, a fee of ₹100 is charged/withdrawal
● During the death benefit settlement period, partial withdrawal is not permitted
● Until the life assured turns 18, a partial withdrawal is not allowed.
Simple strategies to maximise your ULIP returns
As an investor, you invest your hard-earned money with the hope of good returns. Follow the tips and tricks given below to benefit from your policy:
A.Starting early
The earlier you begin, the longer you can stay invested. ULIP focuses on long-term investment, which is only possible with ease when you invest early. Not just the time horizon, early and long-term investment also maximises your scope by compounding the ULIP interests. It is never too late to begin investing immediately.
B.Maximise the investment amount
Assessing near and current financial goals is essential in deciding on the corpus you want to invest. With higher investments, you can accumulate higher returns. So, considering all your financial commitments, try to maximise your investment capacity.
C.Don’t be afraid of equities
Equity funds offer higher returns on the condition of higher risk. Such a condition may make you sceptical towards investing in equities. However, mitigating the risk of equity is an art achievable through long-term and patient investment. You may choose mixed funds, where you can invest in both equity and debt to balance your risk appetite.
D.Keep an eye on the market
SUD e-Wealth Royale offers you the flexibility to be your own fund manager. If you do not want the age-based investment strategy, you can choose the self-managed option. However, with this option comes the responsibility of having a clear understanding of the market.
You must keep an eye on the ongoing market trends so you can switch funds in case of any expected turbulence. Even if you choose the age-based strategy, having a market idea keeps you updated, and you can ask to switch funds if needed.
E.Avoid the temptation to withdraw
After 5 years of the lock-in period, you have the freedom to make partial withdrawals from your ULIP fund. e-Wealth Royale thus offers you the safety of liquidity. This freedom of partial withdrawals is an advantage. However, keep in mind that by staying fully invested for a longer duration, you will be in a better position to make the most of your ULIP. As far as possible, avoid the temptation of ULIP withdrawal until this is the last option.
A.Starting early
The earlier you begin, the longer you can stay invested. ULIP focuses on long-term investment, which is only possible with ease when you invest early. Not just the time horizon, early and long-term investment also maximises your scope by compounding the ULIP interests. It is never too late to begin investing immediately.
B.Maximise the investment amount
Assessing near and current financial goals is essential in deciding on the corpus you want to invest. With higher investments, you can accumulate higher returns. So, considering all your financial commitments, try to maximise your investment capacity.
C.Don’t be afraid of equities
Equity funds offer higher returns on the condition of higher risk. Such a condition may make you sceptical towards investing in equities. However, mitigating the risk of equity is an art achievable through long-term and patient investment. You may choose mixed funds, where you can invest in both equity and debt to balance your risk appetite.
D.Keep an eye on the market
SUD e-Wealth Royale offers you the flexibility to be your own fund manager. If you do not want the age-based investment strategy, you can choose the self-managed option. However, with this option comes the responsibility of having a clear understanding of the market.
You must keep an eye on the ongoing market trends so you can switch funds in case of any expected turbulence. Even if you choose the age-based strategy, having a market idea keeps you updated, and you can ask to switch funds if needed.
E.Avoid the temptation to withdraw
After 5 years of the lock-in period, you have the freedom to make partial withdrawals from your ULIP fund. e-Wealth Royale thus offers you the safety of liquidity. This freedom of partial withdrawals is an advantage. However, keep in mind that by staying fully invested for a longer duration, you will be in a better position to make the most of your ULIP. As far as possible, avoid the temptation of ULIP withdrawal until this is the last option.
Conclusion
Conclusion
Saving for your retirement is paramount for securing financial stability in your later years. A plan like the e-Wealth Royale offers peace of mind and ensures financial independence. By starting early and contributing consistently to your retirement funds, you can harness the power of compounding, growing your wealth substantially.
Reference: SUD Life e-Wealth Royale (UIN: 142L082V01)
Saving for your retirement is paramount for securing financial stability in your later years. A plan like the e-Wealth Royale offers peace of mind and ensures financial independence. By starting early and contributing consistently to your retirement funds, you can harness the power of compounding, growing your wealth substantially.
Reference: SUD Life e-Wealth Royale (UIN: 142L082V01)
Disclaimer
1 Loyalty Addition will be added to the fund by way of creation of extra units and shall be equal to 0.10% of avg. fund value of last 12 months. The benefit will be added only if all due premiums under the policy are paid up to date and in case of revival, no addition will be made w.r.t past policy anniversary. The benefit also not payable post completion of PPT or surrendered or discontinued policies. Wealth Booster will be added to the fund by creation of extra units and shall be equal to 3% of avg. fund value of last 24 months. The benefit is not applicable for surrendered or discontinued policies.
2 Partial withdrawal are not allowed during the first 5 policy year or in case life assured is minor. It is allowed from 6th policy year or when life assured attains age 18 whichever is later. Partial Withdrawals will not be allowed which would result into termination of policy.
Unit Linked Life Insurance Products are different from the traditional insurance products and are subject to risk factors. The premium paid in Unit Linked Life Insurance policies are 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. The policyholder can withdraw the invested amount only after the completion of five plan years. Star Union Dai-ichi Life Insurance Company is the name of the Insurance Company and SUD Life e-Wealth Royale 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 plans, their prospects and returns.
SUD Life e-Wealth Royale | UIN: 142L082V02 | A Unit–Linked Non-Participating Individual Life Insurance Plan Star Union Dai-ichi Life Insurance Company Limited | IRDAI Regn. No: 142 | CIN: U66010MH2007PLC174472
Registered Office: 11th Floor, Vishwaroop I.T. Park, Plot No. 34, 35 & 38, Sector 30A of IIP, Vashi, Navi Mumbai – 400 703 | Contact No: +91 22 7196 6200 | 1800 266 8833 (Toll Free) | Timing: 9:00 am – 7:00 pm (Mon – Sat)| Email ID: customercare@sudlife.in | Visit: www.sudlife.in | For more details on risk factors, terms and conditions, please refer to the sales brochure carefully, before concluding the sale. |Trade-logo displayed belongs to M/s Bank of India, M/s Union Bank of India and M/s Dai-ichi Life International Holdings LLC and are being used by Star Union Dai-ichi Life Insurance Co. Ltd. under license.
2 Partial withdrawal are not allowed during the first 5 policy year or in case life assured is minor. It is allowed from 6th policy year or when life assured attains age 18 whichever is later. Partial Withdrawals will not be allowed which would result into termination of policy.
Unit Linked Life Insurance Products are different from the traditional insurance products and are subject to risk factors. The premium paid in Unit Linked Life Insurance policies are 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. The policyholder can withdraw the invested amount only after the completion of five plan years. Star Union Dai-ichi Life Insurance Company is the name of the Insurance Company and SUD Life e-Wealth Royale 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 plans, their prospects and returns.
SUD Life e-Wealth Royale | UIN: 142L082V02 | A Unit–Linked Non-Participating Individual Life Insurance Plan Star Union Dai-ichi Life Insurance Company Limited | IRDAI Regn. No: 142 | CIN: U66010MH2007PLC174472
Registered Office: 11th Floor, Vishwaroop I.T. Park, Plot No. 34, 35 & 38, Sector 30A of IIP, Vashi, Navi Mumbai – 400 703 | Contact No: +91 22 7196 6200 | 1800 266 8833 (Toll Free) | Timing: 9:00 am – 7:00 pm (Mon – Sat)| Email ID: customercare@sudlife.in | Visit: www.sudlife.in | For more details on risk factors, terms and conditions, please refer to the sales brochure carefully, before concluding the sale. |Trade-logo displayed belongs to M/s Bank of India, M/s Union Bank of India and M/s Dai-ichi Life International Holdings LLC and are being used by Star Union Dai-ichi Life Insurance Co. Ltd. under license.
Beware of spurious or fraud phone calls
IRDAI is not involved in activities like selling insurance policies, announcing bonus or investment of premiums. Public receiving such phone calls are requested to lodge a police complaint
Lifestyle Freedom and Flexibility
Planning for early retirement enables individuals to develop a retirement lifestyle which reflects their interests and values. Whether it’s traveling, developing new interests, spending time with family, or volunteering, early retirees can design a retirement that’s uniquely theirs. Retirement schemes that allow flexible work arrangements, phased retirement, and incentives for early retirement may let people design their post-career lives to suit their needs.
Building Meaningful Connections
Early retirement allows people time – a commodity to spend with those you love forming relationships, bonds and memories. By retiring early, people can concentrate on family, social networks and friends, friendship and community. Retirement schemes that encourage work-life balance, family-friendly practices and social engagement may foster relationships and a social network within retirement.
Personal Growth in Retirement
Retirement isn’t a cessation of employment but an era of personal development, self-discovery, and fulfillment. Early retirement often means new interests, lifelong passions, meaningful activities, and growth in retirement. Retirement schemes that promote lifelong learning, skills development, mentorship, and community involvement may enrich retirees ‘post-career experiences and enrich their purpose and fulfillment.
Community Engagement and Legacy Building
Retiring early creates opportunities for more community engagement, social impact, and legacy building. Individuals who retire early wish to give to the culture, give to charities, volunteer their services and time, and also leave a legacy for generations to come. Retirement schemes which encourage civic involvement, philanthropy, environment-friendly stewardship and environmental responsibility might allow retirees to make a positive change in their communities, and also leave a legacy for their descendants beyond retirement.
Conclusion
Many other benefits of planning for early retirement outweigh the money. It allows people to put health, relationships, personal growth and community involvement first – for a meaningful, purposeful and rewarding retirement. Retirement schemes offer a framework for retirement planning, accessing resources and benefits, and maximizing retirement. When approached thoughtfully, strategically, and in partnership with retirement schemes, early retirement can open up worlds of possibilities for those looking to enjoy retirement. People can lead a fulfilling, meaningful and empowered post-career life by using early retirement planning and using retirement schemes to their advantage. To learn more about retirement schemes, click here.
Disclaimer
Star Union Dai-ichi Life Insurance Company Limited IRDAI Regn. No: 142 | CIN: U66010MH2007PLC174472
Registered Office: 11th Floor, Vishwaroop I.T. Park, Plot No. 34, 35 & 38, Sector 30A of IIP, Vashi, Navi Mumbai – 400 703 | Contact No: +91 22 7196 6200 | 1800 266 8833 (Toll Free) | Timing: 9:00 am – 7:00 pm (Mon – Sat)| Email ID: customercare@sudlife.in | Visit: www.sudlife.in | For more details on risk factors, terms and conditions, please refer to the sales brochure carefully, before concluding the sale. |Trade-logo displayed belongs to M/s Bank of India, M/s Union Bank of India and M/s Dai-ichi Life International Holdings LLC and are being used by Star Union Dai-ichi Life Insurance Co. Ltd. under license.
Registered Office: 11th Floor, Vishwaroop I.T. Park, Plot No. 34, 35 & 38, Sector 30A of IIP, Vashi, Navi Mumbai – 400 703 | Contact No: +91 22 7196 6200 | 1800 266 8833 (Toll Free) | Timing: 9:00 am – 7:00 pm (Mon – Sat)| Email ID: customercare@sudlife.in | Visit: www.sudlife.in | For more details on risk factors, terms and conditions, please refer to the sales brochure carefully, before concluding the sale. |Trade-logo displayed belongs to M/s Bank of India, M/s Union Bank of India and M/s Dai-ichi Life International Holdings LLC and are being used by Star Union Dai-ichi Life Insurance Co. Ltd. under license.
Beware of spurious or fraud phone calls
IRDAI is not involved in activities like selling insurance policies, announcing bonus or investment of premiums. Public receiving such phone calls are requested to lodge a police complaint
