Source: Financial Chronicle

Just two decades ago, prices of food items such as eggs or fruits or vegetables were just a fraction of their prices today. Thanks to food price inflation. Even petrol and electricity are not spared and their prices have gone up by over five times. With every passing day, it is becoming more difficult to cope with the rising cost of living. So even if you are well placed today it is necessary to give some thought to your retirement planning. Today, your rising income will help you cope with the increasing cost of living. Imagine what will happen when there is no reliable source of income but the cost of living in increasing at this pace? In India, the social security system is almost non-existent. In some states, wherever it is available, the benefits are modest at best. Another cause of concern is the increase in our lifespan. With better healthcare facilities available, there is a gradual rise in the percentage of the senior citizens. Research has shown that by 2050, one-fifth of the world's population will be above 60 years. In India, that number will be around 25 per cent.

Retirement planning is always a long-term affair and one should look at such investments from that perspective. The asset management capabilities of life insurance companies are tuned to manage long-term investments and reap better returns over a longer period of time compared with other investment instruments with comparatively short-term perspective.