A Unit Linked Insurance Plan (ULIP) is a popular investment avenue because it combines the twin factors of insurance and investment. It can give you good returns if you choose the right options at the right time. With that being said, you can use an ULIP calculator to get a fair idea about the returns you might get. Here’s how to use the calculator!
Steps to calculate ULIP returns using a ULIP calculator
Here are the steps you need to follow to use a ULIP calculator and find out the returns:
Find a free ULIP calculator online:
Your first job is to find a free ULIP calculator online. Chances are that you will find the calculator on the official website of your bank. So, use that instead of searching all over the internet.
Input the amount to be invested:
Your ULIP returns also depend on how much you invest. So, you need to begin by inputting the amount of money that you want to invest in the ULIP. You can go for the lowest monthly premium, the highest one, or stick to something in the middle.
Choose a payment period:
ULIPs are popular because of the flexibility of the payment period for your premium. You can pay the premium yearly, half-yearly, quarterly, or monthly as per your convenience. You can also pay the premiums as a lump sum amount in one go. The premium amount will change as per the payment period you choose.
Policy term and investments:
Next, you will have to enter the amount that you want to invest. You can choose to invest as per your goals and convenience. Also, at this point, you will have to figure out the term of the policy. You can have a policy for ten, twelve, fifteen, or twenty years.
Choosing the funds to invest in:
You have reached the final stage of using the calculator. Now, you will have to select the funds that you want to invest in. You can choose equity funds, debt funds, or go with a combination of these two. Of course, you need to know the market conditions as well because the returns will depend on that.
Finally, you can click okay, and the returns will show up. Keep in mind that these returns are an approximation as per the current market conditions. If the market situation improves or declines, then your returns will change accordingly over time. Keep changing your inputs in the calculator to see how the changes are affecting your returns. It will help you make a sound decision about choosing the flexible factors associated with a ULIP scheme.
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What are the advantages of using a ULIP calculator?
As mentioned before, the returns might change a bit down the line because of the changes in market conditions and how you switch the funds. It is still a good idea to use the returns calculator because you can get a glimpse of how your ULIP can help you reach your long-term goals. Also, changing your inputs and seeing the impact on the returns will help you better understand the ULIP investment and how you can use it to your benefit.
You are well-aware of how to use the calculator now. Go ahead and give it a try right away.
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