When you decide to pick a tool for your convenience, knowing its benefits beforehand can always be worthy. Especially when it comes to a financial tool, knowing its benefits will may help you make the most of it and walk an extra mile towards your target. The same can happen with a ULIP policy calculator.
A unit-linked insurance plan utilises a part of your premium to provide the life cover while the rest is invested in funds of your choice to earn returns from the market. So, the maturity benefit of the policy depends on the fund value generated by the investment. A ULIP calculator is designed to save you from chunks of complicated calculations and bring the required estimations to your fingertips. Here, if you know the benefits, it may enable you to use the tool in a more efficient manner and ensure a more precise calculation.
Accurate financial projections: Know the future returns
Suppose you have purchased a ULIP plan and, in turn, have invested in selected funds. Like any other investor, you may want to gauge how the investment is going to help you and how much returns can be anticipated. This is a necessary step, as you can always change the investment allocation through fund switches or the premium redirection facility if you feel the funds or the market are not going your way. Estimating the future returns may be easy if you resort to a ULIP calculator. If you provide the details of the premium paid, the selected funds, the corresponding rate of returns, and the policy tenure, it can provide you with accurate financial projections. Here the ULIP calculator can estimate for you the future returns from each of the chosen funds. Summing them up, you can arrive at the amount of wealth that can be accumulated from the total investment.
Assessing potential returns: Understand the ROI based on premiums and tenure
When you choose to invest in market-linked funds, the usual goal is to earn as much as possible. But with bigger gains come bigger risks too. So, while you look forward to good returns from your investment, securing the capital may also be your priority. Especially, if you are a risk-averse investor, avoiding potential losses and protecting the capital can be your prime concern. This becomes easier when you have an idea of how the funds are going to perform in a given situation.
In case of ULIPs. If you know beforehand how the chosen funds can behave in certain conditions of the market, it might help estimate the probable corpus that can be generated through investment.. This is where a ULIP investment calculator may come into the picture.
Even before making a purchase, a ULIP calculator can help you analyse a ULIP plan or compare it with its options. Here, based on the details of the policy term and probable premium payments, the calculator estimates the ROI and the potential returns. This may help you to understand the merit of your investment and assess your decision.
Informed investment choices: Select funds based on risk appetite and goals
Investing in market-linked funds is a bit tricky. With the risk factor determining the gains, any investment can run into losses if the market turns unfavourable. And as it goes with market-linked funds, the higher the risk, the higher the gain. If you attempt to grow your money faster, there remains the risk of suffering a major loss too. Thus, it lies on the policyholder , whether he/she can withstand that risk. So, while wealth creation for a specific financial goal remains the target, it is crucial to align the investment to your ability to take risks.
The investment component in a unit-linked insurance plan lets you select the funds based on your risk tolerance. If you are willing to accept more risk to accumulate bigger wealth, the policy invests mostly in equities or related higher-risk assets and in debts or low-risk funds when you prefer an investment with lower risk. But how would you choose the best possible funds? The answer can be the ULIP calculator.
A ULIP return calculator estimates for you the projected returns from different fund allocations8,^ given the parameters like the chosen premium, policy tenure, desired corpus, and the rate of returns. It may thus let you compare and pick the assets that match your risk appetite as well as the wealth creation goal. Accordingly, you may be able to make informed investment choices.
Customised plans: Tailor premium amounts, tenure, and fund allocation
Suppose Mr. A is looking to invest in a ULIP policy to create his retirement corpus and is scared to lose the capital. Mr. B, on the other hand, wants to grow his money through a ULIP policy to support his son’s dream startup venture, and he is willing to take risks for the same. Can both of them fulfil their targets through the same ULIP plan? Possibly no, as they look forward to a separate size of corpus, they may have different levels of affordability and risk tolerance, and correspondingly varied fund choices.
Every policyholder has their own parameters and different financial goals behind their investment decisions, according to which the choice of financial products needs to be customised. Especially in the case of ULIPs, plans should differ in addressing these varying needs, risk appetite, and affordability. A ULIP calculator could be an ideal choice. As you provide the inputs of the deciding parameters, accordingly it can offer a customised solution, suggesting the amount of premium, policy tenure, and fund allocation options to reach your desired financial goals. In turn, you may get to customise the ULIP plan according to your own unique needs.
Risk evaluation: Evaluate investment risk and returns
Every investment in market-linked funds comes with its own share of risks. While the nature and behaviour of the funds that reflect in the returns, volatility of the market can also affect the resulting gains or losses. It’s therefore quite crucial to keep monitoring the market and adjust the investment strategy and fund allocations as per needs.
A ULIP, for example, is a life insurance plan, which also invests a portion of the premium paid in market-linked financial assets to fetch returns . Here, the policyholder gets to choose these funds and the investment allocation in them as per his/her risk appetite. It also allows reallocation of the investment through fund switches or premium redirection facilities. If the existing funds underperform, market gets volatile, or there’s a change in the policyholder’s financial need or risk appetite. A ULIP calculator can help in these situations.
A ULIP return calculator may aid in estimating the projected returns from different fund allocations at the start of the investment or in the course of it, given the specific financial target, the policy tenure, and the premium chosen. Based on that, a policyholder gets to evaluate the amounts of risks involved and the returns from his/her investment. Consequently, he/she may decide whether to go for a specific fund allocation, continue with it, or change the investment strategy.
Comparative analysis tool: Compare different ULIP plans for better choices
There are many insurance companies in India offering a variety of ULIP plans. These plans have varied features, benefits, and fund choices catering to different needs, risk tolerance, and affordability. For any investor, the choice of a ULIP plan should match his/her monetary need and risk tolerance while being easy on the pockets. To know which of the available plans is most suitable for your requirements, risk-taking ability, and premium-paying capacity, you may need to research well and compare them.
Here, a ULIP calculator may play the role of a comparative analysis tool. On one hand, it estimates the premium payable for a desired corpus in a given policy tenure or vice versa. On the other hand, it can project returns for different fund allocations to help you assess the future value of your investment as well as the risk and rewards. Accordingly, a comparative study is feasible of the available plans, based on which you can choose the plan that aligns best to your investment goal and parameters.
Time-saving: Instant results with minimal inputs
While market-linked investments can be a good way to grow your money, the decision-making and strategy involves a lot of complicated calculations. Likewise, tasks like picking a suitable ULIP plan, making the fund choices, or altering the investment allocation demand a fair share of calculations too. Dreading this, many prefer seeking help from professionals instead of relying on their own capacities. In this aspect, the ease of calculations through a ULIP plan calculator may be considered its biggest benefit, which saves a lot of time as well.
A ULIP policy calculator simplifies the whole process and brings to the tentative values of premium requirements, size of corpus, and policy tenure, as well as the risk and returns from various fund allocation choices. These estimations are done instantly, providing a time-saving alternative to scary chunks of calculations. And for all these to happen, all you need is to key in minimal inputs like the base parameters in a given situation. For example, you can get the estimated fund/maturity value simply by submitting the monthly investment amount, the desired tenure, and the expected rate of return.
Ease of use: Simple interface and user-friendly design
Online tools are usually crafted to simplify complicated assignments to help you attain the best possible solution to your queries. Especially, financial tools are designed to estimate or formulate certain values on your behalf to help you with your investment decision. In the process, they save you from dreaded calculations and provide results instantly. But here’s a catch, unless the tools are easy to use, people won’t have a clarity of how they work and neither be keen to use them. A ULIP calculator may score well on this point.
A unit-linked insurance plan calculator comes with a simple design and interface, which makes it user-friendly. There are defined spaces to key in or select the given parameters, and after that, all you need to do is click on the calculate button. Rest is taken care of by the calculator itself, and the values are generated in an instant. A ULIP calculator, therefore, may not just be easy to use but also a time-saving tool as well.
Goal-orientated planning
For ULIPs , a clarity of the financial objective for which the wealth needs to be accumulated helps in deciding how to go about it. The specific goal may lead to the target corpus, the corresponding premium allocation, fund choices based on risk appetite, and the reallocations as and when needed.
Here, the ULIP calculator may help you with the goal-orientated planning. If there’s clarity regarding the financial objective, corresponding monetary requirement, your affordability, and the risk appetite for wealth creation, an online ULIP calculator can estimate the probable premiums for you, the suggested policy tenure, the projected returns or losses from your fund choices, and the expected fund value that can be generated from your investment. In turn, having a goal-based strategy in place will be easier.
Cost transparency
ULIP plans have different charges payable for the management of the policy as well as for the services offered to the policyholders. These charges, deductible from the premiums or the fund value, affect the amount of the death or maturity benefit of the policy. Knowing these charges clearly can enable the ULIP policyholders to decide, structure, or revise their investment strategies accordingly. This is where resorting to a ULIP return calculator online may benefit you.
Given the fund choices and their details, a ULIP calculator can provide the costs that you’ll have to incur for your policy.8 It estimates the amount to be deducted as charges towards premium allocation, mortality, fund management, policy administration, fund switch, withdrawal, or surrender of the policy, and the corresponding changes in fund value. This may give you a transparent detail of the costs associated with wealth creation through ULIP.
Personalised investment strategy
Every investment strategy needs to be uniquely crafted, as they are supposed to align with the respective policyholder’s needs and preferences. Take the case of unit-linked insurance plans, here, unless the fund choices are matched with the risk tolerance of the policyholder or the premiums align with his/her paying capacity, building the desired corpus may seem a tough task. Tracing the funds that would fetch favourable returns or deciding the premiums according to affordability can be daunting, though. And that’s where a ULIP calculator may offer its advantages.
A ULIP fund value calculator takes into account the amount and tenure of investment and the tentative rates of return to predict the probable returns. Based on that, selecting the funds may seem easier. Again, the online ULIP calculator enables you to check premiums for different policy tenures and corpus targets and vice versa. This may allow you to choose a premium schedule as per your affordability and accordingly personalise your investment strategy.
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