ULIP plan is a clever combination of both life insurance and investment. Here, a part of the premium goes towards life coverage, while the remaining gets invested towards financial instruments.
Before you invest in any life insurance products, you must undertake extensive research and comparative analyses to grab the best deal based on your requirements.
What is an online ULIP calculator?
An online digital ULIP calculator is a handy web-based tool that easily allows investors to determine the plausible outcome of their investments. All you need to do is enter certain critical aspects like premium amount, tenure, age, return rate, etc.
Since ULIPs are subject to existing market risks, this handy tool aids investors in easily determining the probable results of their investment(s).
Moreover, before fund allocation, you must imperatively ensure that your selected ULIP plan suits your requirements best. There is no single formula here that fits all equivalently. Considering all these aspects, a ULIP calculator proves to be quite a handy tool.
Calculate ULIP returns
There are 2 methods for calculating ULIP returns using the ULIP calculator:
- Absolute returns:
This refers to the increase in the asset value over a stipulated tenure. If it is negative, it implies depreciation, while being positive, it indicates appreciation. To calculate the absolute returns of a particular scheme, you need the initial NAV and the current NAV. The formula is {(Current NAV – Initial NAV)/Initial NAV} X 100. - CAGR or Compounded Annual Growth Rate:
This is the indicator of the annual growth rate of a particular investment over a specific period. The formula used here is [Current NAV value/Initial NAV value) ^ (1/ Number of years)} – 1] x 100.
Why do you need to use the ULIP calculator?
ULIP is a wise combination of the safety and security of a standard insurance policy, ensuring the wealth generation of an investment plan. This dual combination makes it a highly popular investment financial tool, especially among risk-aversive investors.
A ULIP calculator comes in handy at this juncture. Using this, you can easily compute the premium payable amount and potential future returns. You can gain a foresight into the future of your investment, make an informed decision and make the necessary alterations based on your requirements.
Features and advantages of the ULIP calculator
By now, it is evident how handy and useful a ULIP calculator is. Some of the most highlighting features and benefits of this digital tool are as follows:
- User-friendly: This tool is very useful and user-friendly. You simply need to enter the investment details like your premium amount, rate of returns, tenure, etc. and the probable result of your returns will be automatically revealed.
- Flexibility: This handy tool allows the investors to ascertain the amount needed to be allocated in any ULIP fund. You can even alter the variables according to your needs, which will change the result.
- Transparent: Based on market fluctuations, the returns on investments are liable to change. ULIP calculator is a transparent tool that reveals the funds’ returns for a stipulated time.
- Planning: With the aid of this digital calculator, you can easily compare and analyse the estimated returns of various ULIPs in the market. Moreover, using a ULIP calculator will provide you with a clear understanding by offering a comparative analysis of cost-benefit and estimating returns.
- Real-time calculations: TheULIP calculator offers real-time calculation results based on the data provided.
- Comparative study: This tool comes in handy for making a comparative study among various plans, which is highly essential before investing in assessing optimum returns based on your exclusive needs.
How does the ULIP calculator work?
ULIPs are unique financial tools that allow investors to invest in several funds while providing life insurance protection. However, however lucrative it may sound, you must have a clear understanding of the concept before investing. It must be at par with your needs. ULIP calculator helps you considerably in this respect. The ULIP calculator works:
- Choose the ULIP investment type: The primary step for using this is to choose the ULIP investment type you wish to proceed with. The market is loaded with several ULIP products, so be wise in your selection. Your selection must consider your financial status, future targets, and risk tolerance capacity.
- Enter the premium: Once you have chosen the ULIP variant, then you must enter the premium amount for your chosen fund.
- Interest: Then enter the current annual interest rate.
- Investment tenure: Enter the investment tenure of your chosen ULIP.
- Return estimation: The ULIP calculator will utilise these details to estimate the outcome of the plausible return depending on the current market conditions.
Conclusion
We have aptly highlighted all the significant aspects of the ULIP calculator. You must utilise its potential before zeroing in on any particular investment after careful research.