ULIP stands for Unit Linked Savings Plan. It is a unique investment option that combines insurance and market-linked investment opportunities, which is highly favourable, especially in the long run. ULIPs usually come with a standard lock-in period of 5 years.

A ULIP calculator is a handy online digital tool offered by financial organisations and insurance providers to help customers and potential customers estimate plausible outcomes, returns, and benefits of their planned investments. It helps in accurate investment planning, estimating approximate returns and benefits, and tax planning.

How do you calculate ULIP investment returns online?

ULIP investment is highly helpful for individuals who are willing to invest in debt and equity markets while enjoying the security of life insurance. Understanding the ULIP investment calculation procedure might seem to be tricky, especially for beginners.

However, if you keep these tips in mind, the journey will become smoother:

1. Before beginning to calculate your plausible ULIP investment returns, you need to gather crucial information like the premium payable amount, premium payment frequency, total number of premiums, investment duration, etc.

2. You need to understand the calculation process. It is based on the Net Asset Value (NAV) of the concerned fund(s). The NAV is the total asset value the concerned fund holds minus the liabilities divided by the total units the investors hold.

3. The calculator will reveal the probable returns as generated by the concerned ULIP investment(s) during the chosen tenure.

The formula for calculating ULIP returns

A ULIP calculator is a very handy and useful digital tool for policyholders. Usually, two types of formulas are used in this context, based on your sum assured amount:

1. Absolute returns: This reveals the percentage enhancement in the total ULIP value, calculated after reducing associated expenses like operating expenses and management costs. The formula is Absolute returns = [ (Current value – Value at the time of purchase) / Value during the time of purchase] X 100. This formula is especially helpful for short-term investments.

2. CAGR (Compound Annual Growth Rate): This procedure aids in the accurate evaluation of the annual growth of your investment for a stipulated time. It aids in determining the return rate received from your ULIP every year. The formula is CAGR = [{(Current Value /Value during the purchase time) ^ (1/total number of years)} - 1] x 100

How does the ULIP calculator work?

ULIPs are a unique market-linked financial investment tool, allowing policyholders to invest in several types of funds with the security of life insurance coverage. Every ULIP investment can be customised accordingly to suit the individual investment targets of the concerned policyholder and his/her risk appetite. However, before investing in any ULIP tool, you need to understand how the ULIP calculator works:

1. Choosing the ULIP investment variant: The primary step for using the ULIP calculator is choosing the most suitable ULIP investment type that you wish to continue with. The market is loaded with several ULIP variants; based on your interest, you can choose either a single-time investment or a regular one. Each fund varies from one other in risk profile and strategy. You should make wise choices based on your financial targets and risk appetite.

2. Enter the premium payable amount: Once you have chosen your ULIP investment type, you must enter your desired premium payable amount. However, you must ensure that the premium dues are paid punctually without fail.

3. Enter the rate of interest: Then, you must add the yearly rate of interest.

4. Investment tenure: You should enter your desirable investment tenure for your ULIP.

5. Return estimation: The ULIP calculator will utilise all the data entered including the policy tenure, premium payable amount, etc. to calculate an accurate estimation of your investment returns. The return amount depends on the current market conditions and the performance of the concerned fund(s). An accurate ULIP calculator will give you a detailed insight into the detailed results of returns, including the probable return on your investment(s).

Significant features of the ULIP calculator

From the above discussion, it is evident that the ULIP calculator is a very handy and useful tool. Some of the most highlighting features of this calculator are as follows:

1. Flexibility in choosing the suitable investment amount: Using this online digital tool, you enjoy the flexibility to select the correct investment amount. This calculator will reveal the potential outcome of your planned investments, based on which you can make the necessary additions and alterations to ensure optimum returns.

2. Easy to use: The online ULIP calculator maintains a user-friendly interface so that using it does not become challenging even for beginners. You simply need to enter all the basic details based on which the calculator will reveal the potential results.

3. Customisable tenure: Based on your choice, requirement, and risk appetite, you can customise your investment tenure using this tool. The calculator will reveal the results, based on which you can proceed accordingly.

4. Real-time calculations: The calculations of this calculator are real-time. It depends on real-time parameters like investment amount, tenure, etc. and it will reveal the expected return amount.

5. Comparative study: Using this handy tool you can make a critical comparative study among different plans and choose the most suitable one based on your specific circumstances.

6. Goal-based planning: With this calculator, you can compare your returns based on altering circumstances.

Conclusion

A ULIP calculator is highly helpful for your ULIP investment schemes. It allows accurate premium calculations in real time, helps in a better understanding of potential returns, makes critical comparative studies among different ULIP plans, and, last but not least, customisation. You can select the most suitable plan for you as you can discover the probable maturity value and outcome of your investments, effective tax planning, realistic expectations, and proper risk assessment.

Financial Disclosure
This press release may contain forward-looking statements. Forward-looking statements describe future expectations, plans, results, or strategies (including product offerings, regulatory plans and business plans) and may change without notice. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements.

This content was first published by KISS PR Brand Story. Read here >> How to use a ULIP calculator to plan your financial goals?