ULIP Calculator: Features and Benefits

The uncertainties around the world reflect the uncertainty of our lives. The pandemic made several individuals realise that things may not always go as planned. It also made everyone understand the importance of securing their lives and also having financial investments to rely on during emergencies. Unit Linked Insurance Plan (ULIP) is one such product that allows you to meet both your goals in a single plan. It provides you with life insurance, along with opportunities for investment.

Learn How To Use A ULIP Calculator

What is a ULIP?

ULIP is a single financial product that offers the dual advantage of life insurance and investment. When you pay premiums for it, they are used to fulfil both these goals. A part of your premium is used for providing you with a life cover. The other half is invested in funds that you select. There are several funds that you can choose from based on your risk appetite.

During your policy duration, if in an unfortunate circumstance where you lose your life, your nominee will receive the death benefit, the death benefit will either be the sum assured or the fund value of your investment, whichever is higher. The life insurance cover ensures that in your absence, your loved ones have a financial backup to rely on.

The investment part of your ULIP is directly subjected to the funds that you have invested in. The several funds available can be divided into three broad categories based on your risk appetite: debt, equity, and balanced funds. Equity funds have a high risk-high reward ratio, while debt funds are low risk-low reward ratio. If you want to mitigate some risk and increase your return potential, you can choose a balanced fund. It comprises debt and equity funds both. You can track the performance of your investment through its Net Asset Value (NAV). If you are unhappy with your fund’s performance, you can switch your allocation from debt to equity or vice versa anytime you want.

The investment component of your UIP will enable wealth creation and the life insurance component will keep you and your family secured. When you are buying a ULIP, the premium you have to pay for it is an important investment decision. You can use a ULIP calculator to get a fair estimate of the premium you need to pay to get the required cover.

What is a ULIP Calculator?

A ULIP calculator is a customised tool that is available online, specifically designed for calculations concerning ULIPs. With it, you can get an estimate of your premiums, along with the expected returns of your investments during maturity. It also allows you to conduct a comparative analysis between different ULIPs.

What are the benefits of a ULIP calculator?

When you are buying a ULIP, a ULIP calculator allows you to get an estimate of your premium amount. Knowing the approximate premium amount will help you in deciding the coverage of your plan, the frequency of your premiums, and the investment component of your plan.

With a ULIP calculator, you can also anticipate the returns that you will make from an investment. When you buy a ULIP, you will come across several funds in which you can invest. With the calculator, when you know the estimated returns, you can choose your choice of funds with ease. There are also some calculators that offer a comparative analysis, allowing you to compare and choose the plan that fits your needs.

What are the features of a ULIP calculator?

There are mainly three key features of a ULIP calculator:

Transparency

The returns of your investment depend upon your market performance. You can track the performance of your funds by their NAV. A calculator will help to estimate the returns that you will get, with transparency.

Provides analysis for investment

The calculator reflects the returns that you are likely to achieve on the funds that you choose. Most allow you to conduct a comparative analysis. When you compare the returns and risks involved in different funds, you can easily find the one that fits your needs.

Easy to use

The calculator is extremely user-friendly. It allows you to change the premium amount and policy tenure to get the numbers in different scenarios. Knowing your premiums, your coverage, and your returns with the calculator will allow you to choose the best ULIP for yourself.