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Six ways in which Life Insurance Can Help You In Retirement Planning

Every working individual stops working at some point or the other. Retiring from work can often mean retiring from the present lifestyle as regular income stops or reduces. Retirement is also the time that our expenses may rise on account of health issues and inflation. This is why retirement planning is an important aspect, and one must consider it as early as possible.

Life insurance policies have an important role to play here. Most people commonly assume that life insurance policies are only for pure protection and provide a cushion to their loved ones in case of an unfortunate event. While the above is true, they can also be great financial tools that can help in retirement planning. They are low-risk, excellent for lowering tax, and ideal for goal-based savings, such as retirement.

If you are wondering how life insurance can help you in retirement planning, here are some things to know:

      • Life insurance plans offer regular income in retirement:

There are different types of life insurance policies that give you a regular source of income in your non-working years. They substitute your income and ensure that you have a financial support to rely on in your older years.

Retirement/Annuity plans can be suitable for all retirees, irrespective of the income group, as they convert your savings that you pay in the form of premiums into regular lifelong income. Moreover, most retirement plans offer loyalty additions and bonuses that boost your retirement fund corpus.

      • Life insurance policies are low risk:

Retirement is different from your working years. With no active source of income, your risk appetite drops significantly. Since you only have a limited pool of savings, using them correctly without losing your money to market volatility is vital.

Retirement plans are a category of life insurance plans that are considered to be fairly low-risk options that offer the protection of term plans and also help you build wealth. Payouts are often guaranteed in such plans, so you can live a stress-free life knowing you have enough money to cover your expenses. 

      • Life insurance retirement plans follow a disciplined approach:

It is a known fact that the earlier you start investing, the more time your money gets to grow. Retirement plans also work in a similar way. Couple this with the fact, that with retirement plans, you need to pay premiums in a regular and disciplined fashion helping you ride out the ups and downs of interest rates and the markets.

This will help you to build a sizeable corpus to maintain your lifestyle even post retirement while building a safety net in case of financial contingencies. Such plans even offer options like choosing your premium payment term and even have the option of how you can receive your payouts once you retire.

      • Life insurance helps you be self-reliable:

No matter how well your children are doing, it is always prudent to be financially independent and have your own wealth to rely on during your retirement years. A life insurance plan can be your companion in retirement and help you be financially self-reliant.

      • Life insurance can help you with medical expenses:

Deterioration of health is a possibility as you age. And medical expenses are the primary cause of concern for most retirees. Life insurance payouts can help you cover these expenses. Not only does life insurance help in medical emergencies, but it can also be useful in ensuring that you get the proper preventative care to live a healthy life after retirement. 

      • Life insurance lets you save on tax:

Life insurance plans offer several tax benefits under Section 80C and Section 10 (10D) of the Income Tax Act, 1961. These can help you maximise your retirement savings and lower your tax output substantially. 

To sum it up

Life insurance is a good choice for  retirement investment planning as it carries low risk and has the potential to help secure you financially in your old age. Moreover, they are quite flexible with customizable features that can suit most retirees or those planning for retirement.

So in the case you are looking for retirement plans, you can consider our plan Reliance Nippon Life Smart Zindagi Plus (A Non-Linked Participating Individual Savings Life Insurance Plan, UIN: 121N143V01):

      • Option to receive income from as early as first policy year
      • Regular tax free income till 85 years of age
      • Limited premium paying options
      • Life cover throughout the policy term
      • Create a legacy for your loved ones


To know more about our plans and which one suits you best, we request you to fill out your details here and one of our experienced advisors will give you a call back.



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