Unit-linked Insurance Plans [ULIPs] are an excellent investment option if you want a safe instrument that delivers good returns. These plans combine life coverage along with investments while also offering tax benefits. A certain portion of the premium is invested in various instruments, such as debt, equity, money markets, or any combination thereof.
However, there is a plethora of ULIPs you may choose from, which makes it difficult to make the right choice. To help you make an accurate decision, you may opt for online calculators that assist you to determine the potential returns you may earn at the end of the investment period.
How to use online ULIP calculators?
Before investing your money, you may want to know the potential returns on your investments. Online ULIP calculators are beneficial in helping you estimate prospective returns. You may not know how to use these calculators and may think they requires complicated calculations. However, using such calculators is very simple and easy and does not require any complex calculations.
You need to provide some basic personal details, such as your name, date of birth, and state whether you are a smoker/non-smoker. Additionally, you must choose the premium amount, the payment frequency, and your investment horizon. You will then need to input the total fund percent, which is the premium amount you want to invest in the investment options offered by the particular ULIP scheme. Based on this information, the online calculator determines the potential returns on your investment at the end of the duration.
Features of online ULIP calculators
The online calculators provide several beneficial features to help you understand the ULIP performance and determine the potential returns on your investments. Here are five such features:
- Versatility
You may modify the investment amount and the premium components as per the policy duration. This helps you calculate your potential returns based on different investment tenure, choice of financial instruments, and investment amount.
- Safe investment
When you determine the potential returns, you are able to make an accurate investment decision. Because online calculators allow you to analyze various funds and the potential returns, you are able to make an accurate investment choice.
- Goal-based investing
It is important that your investment is linked to a certain life goal. A ULIP helps you meet your various financial objectives. An online calculator helps you analyze the most appropriate ULIP to invest to ensure you are able to meet your various financial objectives.
- Complete control
You are able to control your investment with an online calculator. You may enter the premium amount to determine the potential return based on your personal requirements, preferences, and budget.
- Transparency
Online calculators are transparent and allow you to determine the estimated returns when you invest in a particular scheme for a certain period of time.
Benefits of online calculators
Online calculators have several benefits as listed below:
- You are able to make strategic investment plans.
- These calculators simplify the investment procedure and eliminate the need for complex calculations.
- You are easily able to access these calculators online without paying any charges or without any obligations to actually make an investment.
- Such calculators are easy to use with a user-friendly interface that allows you to calculate potential returns without any complexity.
- The online calculators give you the estimated returns, which in turn allow you to make accurate investment decisions based on your age, financial goals, budget, and personal preferences.
Step-wise guide to use ULIP calculators
Using an online calculator is very simple and requires inputting some basic information. Here is a step-wise guide to use such calculators:
- Search online for a reliable and free calculator and then input your personal details, such as smoking habits, name, and birth date.
- Next, you must input the investment amount, which must not cause financial difficulties for you considering your financial situation, liabilities, and expenses.
- You must then select the premium payment frequency that is based on your financial situation. You may also choose a one-time premium payment option based on the amount you want to invest.
- In the next step, you need to determine the investment tenure based on your future financial goals.
- You must deduct the various charges as levied by the ULIP scheme. Following this, you must determine how much of the premium you want to invest towards life cover and how much you want to invest in different financial instruments.
- In the next step, you must allocate the investible premium component to your choice of financial instruments. You need to consider the past performance of the ULIPs before making this decision.
- Finally, select the lock-in period, which is a minimum of five years when you invest in any ULIP scheme. However, it is recommended you choose a longer duration to maximize your returns.
Using an online calculator is not only simple but also very convenient. Moreover, such calculators are easily available and most insurance companies provide these on their official websites.
It is important to understand what is ULIP before you use the online calculators. These calculators enable you to determine the amount you must invest to achieve your various financial goals, such as children’s higher education, building a retirement corpus, or buying a home.
Use an online calculator today and make an accurate investment decision!