Depending on unit-linked insurance plans (ULIPs), this is currently one of the popular products in investment and insurance for today’s investors. These plans provide policyholders with a balanced mix of insurance protection and investment for gains, which helps build value for their families and themselves. However, it is hard to assess what potential yields it gives or how much it costs to build up in ULIPs. Thus, a ULIP plan calculator comes into play. Here’s an amazing guide to understanding how ULIP calculators are useful, how they work, and the premier ULIP calculators available for investors.

What does a ULIP plan calculator mean?

A ULIP plan calculator is an online instrument that lets a person get an idea of the returns on a ULIP plan according to some value inputs like the amount of the premium spent, the term of the coverage, the rate of the anticipated return on the coverage and the sort of investments in the fund including equity, debt or blended. 

Why Use a ULIP Plan Calculator?

This article gives you the benefits of using a ULIP plan calculator to aid your ULIP investment. Here are some of the main reasons to use it:

• Estimate Potential Returns

The prime features are premium, investment tenure, and expected rate of return, giving an approximate idea of the maturity amount. This will let you decide the amount of money possible through the ULIP plan to reach realistic financial objectives.

• Understand ULIP Charges

ULIPs may attract several charges, such as fees for fund management, mortality charges, and other administration charges. ULIP plan calculator, for example, factors in these charges to provide the correct picture of the real returns without the mentioned charges.

• Compare Different ULIP Plans

These vary from one ULIP to another regarding the available funds, costs, and other characteristics. A calculator helps you compare various plans and decide on your preferred plan based on your financial priorities and ability to bear risk.

ULIP Benefits for Investors

Before diving into the premier ULIP calculators, let’s briefly look at some key ULIP benefits:

• Two in One: Insurance and Investment

ULIPs offer life insurance coverage and flexibility for investing your premiums in funds dependent on market linkages like equities, bonds, or mutual budgets. This offers the potential to build wealth while protecting your family.

• Tax Benefits

The money invested in ULIPs enjoys the tax benefits of section 80C, and the maturity amount is generally tax-free under section 10 (10D).

• Flexibility in Fund Switching

ULIPs have an added advantage over funds, allowing policyholders to switch between funds depending on changes in their risk-taking propensity and market forces.

Ways to Properly Harness a ULIP Plan Calculator

To maximize the benefits of a ULIP calculator, follow these steps:

• Choose Premium and Policy Term

Begin by inputting the money you can invest, then select the desired policy period. Long-term goals should be ideal for ULIPs; hence, choose a term that will suit your financial objectives.

• Select Fund Type Based on Risk Appetite

ULIP calculators normally provide options for equity, debt, or balanced funds. While equity funds provide high returns with high risks, debt funds are moderate with low risks.

• Modify Expected Rate of Return

Adjust different return rates to determine the market’s effects on a certain investment. This feature helps you understand what market conditions may do to your returns.

• Check on RAW Estimate of Maturity

Once all the appropriate information has been keyed in, the calculator will endeavor to give an approximate maturity value. Analyzing the data will help you determine if the plan is financially required for your goal set or if changes are required.

Conclusion

People willing to invest in ULIP must use a ULIP plan calculator. These calculators help make the right decision and break up possible returns, charges, and the benefits of the ULIP. For capital creation, retirement options, or constructing your family’s financial nest, a ULIP calculator provides pertinent facts to enable sound decisions.

ULIP calculators from HDFC Life, ICICI Prudential, and SBI Life are user-friendly and reliable tools to help investors better manage their ULIP investments. Through such testing, the ULIP investor can approach the goal of building wealth more systematically and thus achieve that goal more easily.

Disclaimer: This content is for informational purposes only and is not intended as financial advice, nor does it replace professional financial advice, investment advice, or any other type of advice. You should seek the advice of a qualified financial advisor or other professional before making any financial decisions.

Published by Elle G.