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How to evaluate insurance for retirement
To evaluate insurance policies for retirement, consider guarantee and longevity risks. An annuity provides regular income for life and equity investments can potentially increase wealth. Consult a financial advisor.
I am 55 years old and plan to take voluntary retirement very soon. How do I best evaluate the insurance policies to ensure I am getting the best value for money when planning for retirement?
—Name withheld on request
Planning early for your retirement and accumulating a corpus is an important step towards securing your financial future and ensuring a comfortable retirement. It is essential to consider two key risks when planning for retirement —guarantee risk and longevity risk. Guarantee risk refers to the risk of income decreasing later in life, while longevity risk is the risk of outliving your savings. One way to address these risks is by considering an annuity product as part of your retirement planning. An annuity provides regular, guaranteed income for life and offers the option to continue the income stream for your spouse in the event of your death.
One investment strategy for potentially increasing wealth over time is to allocate a portion of your money to equity investments. With this approach, you can systematically withdraw from your equity holdings, allowing you to potentially benefit from market gains while also reducing the risk of significant losses. You may also ensure that you have a balanced and diversified portfolio. This enables you to manage risk and manage returns better, over the long term. Having said that, like we always mention – do consider your investment goals, your risk tolerance/potential to manage risk and your overall financial situation before making any investment decisions. You may consult a financial advisor to help you make informed decisions o your financial objectives.
Sameer Joshi – Chief Agency Officer, Bajaj Allianz Life Insurance.
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First Published:26 Apr 2023, 11:50 PM IST
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