How Does Aviva Life Insurance Support Your Retirement Planning with Tax Benefits?
Retirement should be the most peaceful phase of your life—a time to unwind, explore passions, and spend quality moments with your loved ones. However, financial security is key to making that vision a reality. A well-planned retirement isn’t just about saving money; it’s about making the right investments to ensure long-term stability.
This is where Life Insurance plays a crucial role. Not only does it secure your family’s future, but it also offers long-term financial growth and tax advantages that help you maximise your retirement corpus. With Aviva Life Insurance, you get a strategic combination of protection, wealth creation, and tax efficiency to protect your golden years.
Let’s explore how insurance plans support your retirement goals while offering significant tax benefits.
1. The Dual Advantage of Life Insurance for Retirement Planning
Many people associate Life Insurance with financial protection for their families in case of an unforeseen event. However, a comprehensive plan like the Aviva Signature Investment Plan—Platinum goes beyond protection. It offers investment opportunities that grow your money over time, helping you accumulate funds for the next milestone event of your life.
Additionally, these plans come with built-in tax benefits under the Income Tax Act of 1961, allowing policyholders to reduce their taxable income while securing their financial future.
How Does Life Insurance Fit Into Retirement Planning?
- Ensures a steady income post-retirement: Features like Systematic Partial Withdrawal allow you to withdraw funds after five years to supplement your post-retirement income.
- Market-linked growth: If you opt for a ULIP (Unit-Linked Insurance Plan), your investments benefit from market appreciation, helping you accumulate a substantial retirement corpus.
- Tax-efficient wealth accumulation: Contributions and withdrawals are structured to provide tax-saving benefits under various sections of the Income Tax Act.
2. Maximise Your Savings with Tax Benefits
One of the biggest advantages of investing in Life Insurance for retirement planning is its tax savings. Let’s break down how Aviva Life Insurance helps you maximise these benefits:
Tax Benefits on Premium Payments (Section 80C)
- The premiums you pay towards Life Insurance are eligible for tax deductions under Section 80C of the Income Tax Act.
- You can claim up to ₹1.5 Lakh in deductions annually, reducing your overall taxable income.
Tax-Free Maturity and Death Benefits (Section 10(10D))
- The maturity benefits received from a ULIP or a traditional insurance plan are tax-free under Section 10(10D), provided the total premiums paid do not exceed 10% of the sum assured.
- In case of the policyholder’s demise, the death benefit paid to the nominee is also 100% tax-exempt under this section.
Tax-Free Partial Withdrawals Post-Lock-in Period
- If you invest in a ULIP plan like Aviva Signature Investment Plan – Platinum, you can withdraw partially after a five-year lock-in period without incurring taxes.
- This makes it a great tax-efficient tool for funding expenses in your retirement.
Tax Benefits on Term Insurance (Section 80D)
- If your policy includes a health rider, such as a critical illness benefit, the premium paid towards it qualifies for tax deduction under Section 80D.
- Policyholders can claim an additional deduction of up to ₹25,000 (or ₹50,000 for senior citizens).
An individual wanted to secure his retirement while optimising his tax savings. With an annual salary of ₹30 Lakh, his tax liability was around ₹5 Lakh. To reduce this, he invested ₹1.5 Lakh in the Aviva Signature Investment Plan—Platinum, availing himself of a deduction under Section 80C. This lowered his taxable income to ₹28.5 Lakh and reduced his tax burden by ₹45,000.
Additionally, he included a critical illness rider under his term insurance, allowing him to claim an extra ₹25,000 deduction under Section 80D. After five years, he started making tax-free partial withdrawals to fund his children’s education, and upon retirement, his ULIP maturity benefits remained tax-exempt under Section 10(10D). By planning strategically, he ensured financial security for his family while enjoying significant tax benefits.
3. Retirement Planning with Aviva Signature Investment Plan – Platinum
Aviva India’s ULIP plans can be used for planning retirement as they offer a structured way to build wealth while securing your family’s future. Here’s how this plan helps you create a reliable retirement strategy:
1. Systematic Partial Withdrawal Option
- After five years, you can withdraw funds to meet post-retirement expenses like medical bills, travel, or daily needs—without disrupting your overall investment.
2. RetireSafe Feature for Market Protection
- Market fluctuations can threaten your savings as you near retirement. To protect your wealth, the RetireSafe feature automatically reallocates your funds to low-risk investments in the last three years of the policy.
3. Diverse Investment Funds for Growth
- Choose from eight investment funds, including Balanced, Growth, and Midcap options, to align with your risk tolerance and long-term financial goals.
4. No-Cost Fund Switching for Investment Optimization
- Aviva allows you to switch your funds at no extra cost, enabling you to optimise returns based on market conditions.
5. Flexibility to Extend Maturity Age
- With the ability to extend the maturity age up to 85 years, you can continue to benefit from market-linked returns well into your retirement.
4. Term Insurance: The Safety Net for Your Retirement Plans
While investment-linked plans help you build wealth, Term Insurance ensures that your family remains financially secure if anything unexpected happens. Here’s why Term Insurance is a must-have in your retirement planning:
- Low-cost protection: Term Insurance is the most affordable way to ensure your family’s financial security.
- Lump sum payout: In case of an untimely demise, your family receives the sum assured, which can cover living expenses, debts, or future financial goals.
- Tax benefits: Term Insurance premiums qualify for deductions under Section 80C and Section 10(10D).
With Aviva Term Insurance, you can safeguard your family’s future while enjoying tax-saving benefits during your earning years.
Secure Your Retirement with Aviva Life Insurance
Retirement planning isn’t just about saving money—it’s about making wise financial decisions that ensure stability, security, and growth. Aviva’s range of Life Insurance and Term Insurance products are designed to give you the dual advantage of financial protection and tax efficiency.
Investing in a ULIP like Aviva Signature Investment Plan – Platinum allows you to build wealth systematically while enjoying significant tax benefits under Sections 80C, 80D, and 10(10D). And with Aviva Term Insurance, you can safeguard your family’s financial future in case of any uncertainties.
So, why wait? Start planning today and enjoy a stress-free retirement with Aviva’s comprehensive insurance solutions. Live today, secure tomorrow!
*Standard T&C Apply
**Tax benefits are subject to change in prevalent tax laws.
***Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.
****Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
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