Should ULIP be part of your retirement portfolio? 3 experts weigh in
Planning for retirement is a crucial aspect of one's financial journey, and selecting the right investment instruments to build a solid retirement portfolio is no easy task. Amongst the various options available, Unit Linked Insurance Plans (ULIPs) have gained significant popularity in recent years. ULIPs offer the dual benefit of insurance coverage and investment opportunities, making them an intriguing proposition for retirees.
It gives you the flexibility to invest in high-risk equity funds that offer higher returns, low-risk debt funds or a combination of both, based on your risk appetite. In this article, we will delve into the subject and provide insights to help you make an informed decision regarding the inclusion of ULIPs in your retirement planning. One of the key reasons why ULIPs should be a part of your retirement portfolio is their potential for long-term wealth creation.
ULIPs offer individuals the opportunity to invest in equity funds that have historically delivered higher returns than traditional fixed income instruments. By staying invested in ULIPs for a longer duration, individuals can benefit from the power of compounding and generate substantial wealth over time. ULIPs also offer attractive tax benefits, making them a valuable addition to any retirement portfolio.
Under Section 80C of the Income Tax Act, individuals can avail of tax deductions for the premiums paid towards ULIPs, up to a maximum limit of Rs. 1.5 lakh per annum. Additionally, the maturity proceeds from ULIPs are tax-free under Section 10(10D) of the Income Tax Act, making them a tax-efficient investment option.
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