Janashakthi Insurance deputy chairman Chandra Schaffter said only 5 percent of the population had retirement cover at a time when the island's over 65 population was expanding rapidly.
"More and more people are living longer than we expected and they are becoming a burden on the state or working population," Schaffter told reporters in Colombo.
"One problem is dying too young; the other is living too long. So retirement planning is very important today."
The 'Janashakthi LifeSaver' branded retirement plan could be purchased by anyone at any age. Even at 75 a policy could be started with a lump sum premium, he said.
The policyholder can decide on a pension plan with as little 1,000 rupees, set aside periodically during the working years. Additional money could be paid in if the policyholders decides to save more, Schaffter said.
Shehara De Silva, general manager sales and marketing said after 12 installments are paid the policy will never lapse and some cover will be available. The policy holder could top it up at any time.
The firm says the policy will pay tax free maturity benefits. The policy holder can opt for an income for a fixed term of 10,15 or 20 years, a lifetime or a lump sum.
Schaffter said the policy also comes with life insurance cover (death risk) and disablement cover and the spouse would also benefit.
The money will be locked in for a minimum of 5 years.
"Or you can tailor this policy for a variety of needs other than retirement, such as education needs of children," Schaffter said.
He said the firm was also working on a plan to eventually incorporation health insurance into the plan.