ULIP Calculator

ULIP Calculator

by Editor

A ULIP calculator is a tool that enables a policy buyer to compute the premiums and check ULIP returns. There are plenty of financial websites that offer the facility of a ULIP calculator. The tool computes ULIP returns offered by a particular ULIP plan on the basis of its premium and policy tenure. Some ULIP calculators offer the option of comparing the best ULIP plans based on the offered returns. It enables an insurance buyer to opt for a plan that offers them the best returns.

Compare the best unit-linked insurance plans with ULIP calculator and buy the plan that suits your requirements.

As it is, a ULIP calculator makes premium calculation easy and saves the hassle of computing the premiums and returns of a ULIP.


Why Use ULIP Calculator?

ULIPs remain one of the best financial instruments for those looking to safely invest their money for lucrative returns, and enjoy comprehensive life cover and tax benefits, at the same time. But there is an overabundance of ULIP plans making it difficult for even the most seasoned of investors to invest in one of the best ULIP plans to get the best returns on their investment. This is where free online ULIP calculators come to the rescue of investors.
Online ULIP Calculators can help potential investors calculate the estimated returns for their investment at the completion of the tenure of the ULIP policy. With the help of free online ULIP calculator, investors can easily calculate the amount they need to invest in the plan in order to fulfil their future financial goals.

How to Use ULIP Calculator?

Typically, all investors want to understand the rate of returns they will be able to generate before actually investing their hard-earned money in a ULIP plan. This is where online ULIP calculators come to the rescue of investors. But here’s the BIG QUESTION: how to use ULIP calculators? Wouldn’t it require complex calculations? Well, it is very easy and convenient to use online ULIP calculators and it doesn’t require investors to do complex calculations.

In order to use online ULIP calculator to calculate the return on ULIP investments, all investors need to do is to fill up personal details including their names, date of birth, and whether they smoke or not. Once done, investors are required to fill in the premium amount they wish to pay, select the frequency of premium payment and fill in the duration for which they want to stay invested in a ULIP plan. Then, they need to fill in the total fund percentage. This can be done by filling up the fraction of premium one wants to invest in a particular investment fund option available under their intended ULIP plan. By simply entering all these details in an online ULIP calculator, one can easily calculate the exact rate of return they will be able to generate on their ULIP investment.

Please Note: Online ULIP calculators calculate the return on investment based on a certain assumptions. That’s why it is important to carefully read through fine prints of your intended UIP plan before actually investing in it.

Step-by-step Guide to Using ULIP Calculator

Here’s a step-by-step to using ULIP calculator that is sure to help both novice and seasoned investors.

Step 1: First things first, find a trustworthy source that offers an option of free-to-use, online ULIP calculator. Now, fill in your personal details including name, date of birth, and smoking habits.

Step 2: Now, fill in the amount of money you wish to invest in your intended ULIP plan. This is also called the premium amount. Always pick a realistic premium amount that you will be able to pay for the entire tenure of your intended ULIP plan. Carefully take into consideration your present financial liabilities and expenses in order to arrive at the exact premium amount that you would want to invest in the intended ULIP plan.

Step 3: Now, select the frequency of premium payment. Select the frequency that best suits your financial capabilities at the time of the inception of your intended ULIP plan. You may take your pick from one-time, lump-sum Single Premium payment or annual, quarterly or monthly premium payments depending upon your financial capabilities and the terms of your intended ULIP plan.

Step 4: The next step is to then mull over the term of ULIP investment. Carefully mull over the time period for which you would want to stay invested in the ULIP plan. After a careful analysis, fill up the policy tenure according to your future wealth creation objectives and the terms stipulated by your intended ULIP plan.

Step 5: Now subtract all the applicable charges from your premium payment as stipulated by your ULIP plan. Once done, select the fraction of premium you would want to invest towards the life insurance coverage and the fraction you would want to put in investment funds.

Step 6: Now take a pick of the investment funds where you would want to allocate your premium for investment. Most ULIP plans allow investors to invest in equity or debt instruments or in the combination of both. But before taking your pick, be vigilant to analyse the past performance of your choice of funds. Experts suggest investors to understand how the intended funds have performed in the market, for at least past 3 years.

Step 7: The last step is to select the lock-in period of your ULIP investment. Remember, ULIP plans offers a minimum lock-in period of 5 years. This means you will need to select at least a 5 years lock-in period. However, investment experts advise to pick up a longer lock-in period in order to generate the maximum returns on ULIP investment.

That’s it! Once you are done filling all these information, click on the ‘Calculate Estimated Returns’ button in order to get the amount of money you’re likely to generate as the return for your ULIP investment.

By now, you would have understood how easy and convenient it is to use an online ULIP calculator. The best part is that these online ULIP calculators are freely available on the web and one can easily locate a few by running a simple web search. In fact, most reputed life insurance companies offer the option of online ULIP calculators at their official websites. These online ULIP calculators are mostly free-to-use.

Using these mostly free-to-use, online ULIP calculators, investors can also understand the amount of money they need to invest in order to realize their future wealth creation objective, be it building a corpus for successful retirement or future planning for their child’s higher education. In addition, investors may choose to change the variables when using online ULIP calculators in order to get to the exact amount they need to invest in order to meet their future financial goals. Here it is important to take into account the estimated inflation rate in order to compute precise rate of return for ULIP investments.

Features of ULIP Calculator

Most ULIP calculators available online are typically loaded with multiple features to help investors calculate the exact rate of return they will be able to generate with their ULIP investments. Here is a smattering on just some of the many standout features of online ULIP calculators:

Goal-Based Financial Planning

It is important for an investor to clearly mull over the objective of their future financial objectives in order to understand how much they need to invest. This is where ULIP calculator comes to the rescue of investors. It helps investors analyze which investment fund would help them quickly meet their future financial goals and generate maximum returns on investment.

Complete Transparency

Yet another standout feature that makes ULIP calculators so popular amongst both new and seasoned investors is its transparency. It shows exactly how much return would an investor get when investing in a particular fund for a specific period of time.

Utmost Flexibility

Online ULIP calculators allow investors to change the investment amount and premium component in accordance with the tenure of the policy to understand how returns will fluctuate according to different policy tenure, investment amount and choice of investment funds.

Total Control

In addition to transparency and flexibility, ULIP calculators also offer complete control to investors allowing them to calculate the premium and check the estimated return on their investment as per their preferences, budget and requisites.

Safe Investment

calculating the return on investment using ULIP calculators helps investors safeguard their investment. This is because ULIP calculators allow investors to analyze different investment funds and the likely returns they can generate before making ULIP investments.

Benefits of ULIP Calculator

Online ULIP calculators come packed with a host of benefits for the investors. Here’s a list of just some of the many benefits of the ULIP calculator.

  • Using an online ULIP calculator can help investors plan their investments strategically.
  • ULIP calculators make complex financial calculations easier for investors helping them get an estimated result and make the right investment decision according to their age, budget, preferences and future financial objectives.
  • ULIP calculators are easily available online and can be used free of cost, without any obligations attached with them. All thanks to easy-to-use features and user-friendly interface, investors are required to just enter their intended details in order to compute returns on their investment automatically and accurately.
  • Online ULIP calculators make the otherwise complex investment process simpler and non-complex for both first-time investors as well as seasoned investors.

Charges Involved in the Calculation of ULIP Premium

The premium of a ULIP has a number of components. Some of these components are the charges associated with a Unit-linked Investment Plan. Here is a list of those charges.

The premium of a ULIP has a number of components. Some of these components are the charges associated with a Unit-linked Investment Plan. Here is a list of those charges.

Discontinuation Charges

The policyholder is liable to pay this charge if he/she decides to exit the ULIP before the end of the lock-in period.

Mortality Charges

A mortality charge is levied in lieu of the insurance component of a ULIP. These charges vary on the basis of age and lifestyle of the policyholders.

Surrender Charges

It is levied at the time of premature withdrawal of the units.

Fund Management Charges

As the name suggests, it is charged for the management of the fund. This charge is usually a certain percent of the assets in question. The fee is worked out by the insurer before computing the NAV (Net Asset Value) of the funds.

Now, what is the NAV of a ULIP?
NAV of a ULIP is the actual value of a fund’s asset after deducting the liabilities per unit.
It is calculated by a simple formula:

Net Asset Value (NAV)=(Asset^’ s gross value-value of the liabilities)/(Number of Outstanding Units)

Policy Administration Charges

It is levied by the insurance company to recover any money paid towards the maintenance of a ULIP. Policy administration charges involve any expenses related to policy paperwork, premium intimation and reminders, etc.

Premium Allocation Charges

It is a one-time charge levied to compensate for any expenses incurred during policy issuance. Premium allocation charges include the cost of underwriting, agent’s commission, etc.

Fund Switching Charges

The best ULIP plans come with the flexibility of selecting the desired fund option and switching between the funds. As the name suggests, Fund Switching Charge is a fee that is charged for switching between the funds.

Top 10 ULIP Plans

Aegon iMaximize18yrs to 50 yearsRs. 24000 to 36000
PNB Metlife Smart Platinum7yrs to 70 yearsRs. 30000 to 60000
HDFC Life Click2Invest0 to 65 yearsRs. 1000 to 24000
SBI Life eWealth18yrs to 50 yearsRs. 1000 to 24000
Bharti Axa eFutureInvest18yrs to 60 yearsRs. 18000 to 25000
Tata AIG Life Invest Assure II – Balanced Fund4yrs to 55 yearsRs. 75000 to 120000
Bajaj Allianz Future Gain1yr to 60 yearsRs. 2500 to 25000
ICICI Prudential Life time Classic0 to 65 yearsRs. 30000 to 50000
Aviva igrowth18yrs to 50 yearsRs. 18000 to 35000
Max Life Fast Track Growth Fund18yrs to 50 yearsRs. 25000 to 100000