ULIP Calculator

What is a ULIP calculator?

A ULIP calculator is an online tool that is used to calculate ULIP premiums and get an idea of the wealth a ULIP plan will generate in the entire tenure. The ULIP calculator is easy-to-use and free of cost. It has various variables like the tenure, the expected return on investment and the financial objective. Before making a ULIP investment one can use a ULIP calculator to get the estimated premiums and the potential returns from a policy.

How is ULIP calculator helpful for offline purchases?

ULIP plans can be bought both online as well as offline. Even though offline plans have to be bought through agents or physical branches, one can use the ULIP calculator to compare plans and get the future value of the investment. Using a ULIP calculator helps in making informed decisions. 

Is ULIP plan a good investment?

ULIP is an insurance cum investment option that helps you build wealth while simultaneously enjoying the protection of life insurance. ULIP plans channelise your savings into market-linked instruments, which ensures market linked returns. The flexibility and returns offered by ULIP plans make it one of the preferred investment option. The accumulated funds are invested in equity and debt as per the financial objective and risk profile of the investor. The policyholder gets to choose from multiple fund options and also switch between ULIP funds as per his/her wish.

How does ULIP work?

ULIP is a dual-use insurance cum investment plan. It provides life insurance cover along with market-linked returns. It provides the dual benefit of protection as well as investment. The investment is made through specialised funds that invest in equity, debt or a combination of both. ULIP investment has a lock-in period of five years. If the policyholder dies during the tenure of the policy, the higher of the fund value or the sum assured is paid to his/her nominees. The fund value is paid if the policyholder outlives the policy.

How can I buy a ULIP plan?

ULIP plans are available online as well as offline. To buy a ULIP plan offline, get in touch with an insurance agent or visit the nearest branch of Bajaj Allianz Life Insurance Co. Ltd. Alternatively, ULIP plans can also be bought online. One just has to submit documents that establish his/her identity and address and pay the premium to buy a ULIP plan.

What is fund value in ULIP?

The money collected from policyholders is invested through ULIP funds. The total amount in a fund is divided into small equal units. Each investor is assigned a certain number of units according to his/her investment. The fund value is the current market value of your investments in various funds. It tells about the market performance of the funds.

What is ULIP NAV?

The Net Asset Value or NAV of a ULIP plan is calculated by adding up the total ULIP funds on a date and deducting various expenses like operating and management charges from it. The net value of the funds is divided by the total number of the units in the funds to get the net asset value and is published by the insurers on their website. 

Is mortality charge deducted for the entire duration of the plan?

To understand the mortality charge, it is important to understand what is ULIP and why is mortality charge levied. The mortality charge depends on the sum at risk of the insurer, which is essentially the amount of the sum assured more than the fund value. The insurer has to pay the sum at risk from its pocket. To cover the sum at risk, insurers levy the mortality charge, which is charged with other expenses.

Are returns guaranteed under ULIPs?

The returns are not guaranteed under ULIPs. The accumulated corpus is invested in funds, which are a mix of debt and equity. Since ULIPs invest in market-linked instruments, the returns are not guaranteed, but investors can choose the funds as per their risk profile and investment expectations. 

How do I pay ULIP premiums?

Just like buying a ULIP plan, the premiums can also be paid offline as well as online. ULIP premiums can be paid as a lump sum or in monthly, quarterly, half-yearly and annual instalments. Some ULIP plans have a limited premium payment tenure, while other payment tenures run for the entire duration of the policy.

What are the benefits of the ULIP plan?

o Life insurance protection during the policy tenure,
o Market-linked returns on your investments, associated with risk
o Tax benefits on your premium and the policy benefits (subject to specified terms and conditions under Income Tax Act, 1961),
o Flexibility through partial withdrawals, switching, top-up and premium redirection, subject to policy terms & conditions
o Creation of a market linked corpus for your financial goals.

What are the tax benefits under the ULIP plan?

The tax benefits under ULIP plans are as follows –

o Premiums paid for the ULIP are eligible for a deduction under Section 80C of the Income Tax Act, 1961. Premiums up to 10% of the sum assured, subject to a maximum of Rs.1.5 lakhs, are allowed as a deduction¹.
o Fund switching is tax-free².
o Death benefit is tax-free³.
o The maturity benefit may or may not be tax-free under Section 10(10D), subject to specified terms and conditions4.

In case of death, what benefit does this plan give?

The death benefit under ULIPs depends on the type of plan that you have bought. There are two main types of ULIPs, based on death benefit payout –
a) Higher of sum assured or the available fund value is paid on death
b) The sum assured and the fund value are paid on death²

How to buy a ULIP policy online?

Insurance companies offer different types of ULIPs online. You can visit the insurer’s website, check the available online ULIP plans, choose the suitable plan, and buy online. To buy, you would be required to fill up an online proposal form and pay the premium online through any of the digital payment modes.

Where & how is my money invested?

The premium that you pay towards the ULIP is invested in market-linked securities after the relevant ULIP charges are deducted from it.
ULIPs offer different types of market-linked investment funds. Depending on the funds that you select, the premium is invested.

At what age can I start a ULIP plan?

You can start a ULIP plan at any age, provided the age falls under the minimum and maximum age limits of the chosen policy. Many ULIPs allow coverage from 3 months onwards. The maximum entry age, however, is limited to 65 or 70 years depending on the features of the plans. This may differ from Insurer to Insurer.
So, you can start a ULIP within the minimum and maximum age bracket.
That said, it is better to start ULIP as early as possible so that you can opt for a long-term tenure and also save affordably to create a corpus for your financial goals.

Can I surrender a ULIP plan?

Surrender of a ULIP is allowed after the lock-in period of 5 years. You can also surrender the plan during the lock-in period, but you won’t get the surrender value immediately. In such cases, the invested premiums are moved to the discontinued policy fund for the remaining lock-in period. Once the lock-in period is over, the discontinuance value is paid.

What are the charges in the ULIP plan?

A ULIP plan has different types of charges. Some of them include the following –
o Premium allocation charge – deducted from the premium
o Mortality charge – deducted from the fund value to provide life insurance cover
o Fund management charge – deducted from the fund value to pay for the professional management of the chosen investment fund
o Policy administration charge – deducted from the fund value towards the administrative charged incurred by the insurer
o Policy discontinuance charge – if you surrender the policy within the lock-in period of 5 years.
o Switching charge – as and when applicable
o Partial withdrawal charge – if applicable
o Miscellaneous charge – for other applicable charges.