best ulip plan for retirement

Why ULIPs are One of the Best Retirement Planning Instruments?

ULIPs offer flexibility, growth, and protection, making them a smart, all-in-one tool for retirement planning.

Written by : Knowledge Centre Team

2025-11-01

1137 Views

8 minutes read

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Retirement is one of the milestones that everyone aspires to reach. After decades of working hard and juggling responsibilities, everyone dreams of a retirement that’s financially secure and stress-free. The right retirement plan ensures you enjoy that peace of mind, with a steady income stream to support your lifestyle and medical needs.

But What Makes a Retirement Plan Truly Effective?

Proper retirement planning will ensure that you have a steady flow of cash after retirement. A good retirement plan and investment will give you a large enough corpus to meet your expenses for a long time.

 Unit Linked Insurance Plans (ULIPs), New Pension Scheme (NPS), PPF, etc., are some of the good investment options for retirement. ULIPs offer the dual advantage of investment and insurance, along with features specifically designed to support long-term goals like retirement. Let’s explore why ULIPs are emerging as one of the most efficient and versatile tools for retirement planning.

Key Takeaways

  • ULIPs combine life insurance with market-linked investments, ensuring wealth creation while protecting your family.

  • With options to invest in equity, debt, or hybrid funds, ULIPs allow you to adjust your portfolio based on your age, income, and risk appetite.

  • You must stay invested long-term to earn extra units through periodic bonuses.

  • ULIPs offer liquidity in emergencies. After the 5-year lock-in, you can make tax-free partial withdrawals to manage any financial shortfalls.

  • ULIPs offer tax savings under Section 80C.

What Makes a Good Retirement Planning Instrument?

Before diving into why ULIPs are effective, it’s important to understand what features make an ideal retirement investment plan:

  • Lifetime Investment Option: An ideal retirement plan should continue throughout your life. With this option, you don’t have to worry about switching your money from one investment to the other, especially after retirement. You can use a single investment plan to save and draw a pension later.
portfolio diversification
  • Should be Tax-Efficient: Taxes and inflation are the two great enemies of your wealth. You would not want the hassle of paying taxes even after you retire. You should go for the option that provides you with tax benefits and gives you wealth after you retire, which is not subject to taxation.
  • Multiple Options to Invest: Each investor has different needs and nature. Therefore, the retirement option you would want should provide you with the flexibility to choose the type of funds in which you would invest. The market does not remain constant, so there should not be a fund that requires you to put all your money in and that cannot be changed. A plan should provide you with the authority to choose your own way.
  • Portfolio Management Option: The retirement option must have the feature to manage your portfolio in such a way that your risk does not increase while you get higher growth of your fund. You should be able to change how your money is allocated.
  • Option to Withdraw Money: Though the funds should stay invested in your retirement plan, what if something comes up and you really need money? The plan should allow partial withdrawal from the corpus in such emergencies.
    Any investment option that carries these features can be your best retirement savings option. ULIPs from life insurers are definitely one option offering these features.
    However, these are not the only features that make ULIP the best retirement planning instrument.

Turn Small Investments Into Big Wealth with ULIP

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Why are ULIPs the Best Retirement Instrument?

ULIPs provide some splendid features that can help you build a sufficient pool for yourself and get you set for your retirement. They will provide you with life coverage of up to 100 years. With this option, you will stay covered even after your retirement. This will give your investment more time to build, and the more time your investment remains untouched, the bigger your corpus will be. Here are some of the reasons that make ULIPs the best retirement instruments:

  • Invests in Asset Mix (Equity & Debt): ULIPs provide you with an option to invest in not just one but different funds. Here you have the opportunity to invest either in equity or debt, or a hybrid involving both equity and debt.
  • Automatic Portfolio Management: After retirement, you might prefer a hands-off approach. ULIPs offer automated rebalancing that adjusts your portfolio to maintain the chosen asset mix, helping reduce risk without constant monitoring.
    For instance, if you select a 50:50 allocation between equity and debt, the plan automatically rebalances your portfolio quarterly, even if market movement changes the ratio. The automatic balancing will bring the mix back to the level you chose every few months.
  • Bonus Additions for Growth: ULIPs also provide you with bonus additions from time to time that contribute to your fund’s growth even more. These additional rewards include:

    1. Wealth Booster: This gets you bonus units if you have invested for more than 5 years. The units are automatically added to your existing fund, without any charge.
    2. Loyalty Additions: This is also the additional amount a user gets for staying invested. These start at the end of the 5th year.
  • Tax-Free Partial Withdrawals: Under ULIP, you are also provided with the chance to withdraw money. You can withdraw a partial amount at the end of the lock-in period at no extra cost. This can help you if you are in strict need of money. Also, partial withdrawals are completely tax-free after the 5-year lock-in period.

Why ULIPs Outperform Traditional Retirement Tools?

While options like NPS or PPF offer stability and tax benefits, they often lack flexibility in fund choice or withdrawal options. ULIPs, on the other hand, provide:

  • Customised risk exposure

  • Liquidity through partial withdrawals

  • Greater long-term growth potential

  • Integrated life insurance protection

  • Tax benefits under Sections 80C and 10(10D)

With ULIP options by Canara HSBC Life Insurance, you also get the advantage of goal-based portfolio strategies, fund switching, and systematic transfer options, all aligned to suit your retirement vision.

Final Thoughts

Retirement is a phase of life you should look forward to, not worry about. The financial steps you take today are what will determine whether you can enjoy the freedom, security, and peace of mind you deserve tomorrow.

Unit Linked Insurance Plans (ULIPs) offer an ideal blend of long-term wealth creation and life protection. With the ability to customise your investment across equity and debt, manage risk through automated portfolio strategies, and make tax-free partial withdrawals, ULIPs stand out as one of the most flexible and effective retirement planning tools available.

But to truly maximise the benefits of a ULIP, choosing the right provider is crucial. ULIP plans by Canara HSBC Life Insurance are designed with retirement goals in mind. So, don’t leave your future to chance. Start your retirement journey today and build a financially independent life for yourself and your loved ones.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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