These days, with the economy fluctuating every other day, the job market dwindling under the pressures of Artificial Intelligence, and life’s unpredictability having reached its peak, life insurance is your safety net. Fortunately, even life insurance has evolved to accommodate the financial needs of investors. No longer is it just about the death benefit or maturity benefit. You can become a smart investor, planning for the future of your loved ones while growing your net worth simultaneously.
What are ULIPs?
ULIPs are Unit Linked Insurance Plans that allow you to put aside money for your family and loved ones as well as invest in the current market, take some risks, and earn returns on your premium investments.
ULIP plans are designed to accommodate death benefits, maturity benefits, and financial growth in real-time. Much like most life insurance plans, you must choose the sum assured for ULIP plans, the tenure of the policy, and the premium. But there’s more.
After the basic parameters, you can choose investment opportunities based on how much risk you would like to take in the current market. Every investment has its pros and cons so you do need to discuss with your insurance advisor. Regardless depending on your penchant for high, low, or medium risk, you can invest in debt, equity, or mixed ULIP plans.
Once you determine exactly how much money you would like to make off of your investments and in the type of market that makes you feel comfortable, you can use a ULIP calculator to ascertain how much return on your investments you are going to receive with the ULIP plans.
What are ULIP calculators?
ULIP calculators are instruments that help simplify the process of investing in ULIPs. You can use the ULIP calculator to determine how much money you need to invest in the crossbred life insurance plan and make more money.
ULIP calculator use several parameters, including your age, tenure of ULIP plans, and the premiums that you can comfortably pay. They help plan your finances effectively so that you can set aside the sum assured for your loved ones, otherwise referred to as beneficiaries and still overflow your life insurance cup with additional monetary benefits.
You can choose your ULIP plans from a number of available options. The insurance provider shortlists viable investment opportunities and debt and equity management and shares the details. You can use the information to choose ULIP plans that make you feel comfortable. Take into account your zest for risk-taking and choose the ULIP plan that is best for you and your loved ones.
Once you have determined how much the sum assured would help your family in case of an untimely demise, how long you want to keep investing in suitable ULIP plans, and how much premium you can pay without stressing your current financial situation, feed them into the ULIP calculator along with your personal details.
This particular financial instrument takes into account your risk appetite and the other parameters and spits out the possible returns on your investment. You can adjust the sum of your premium based on the returns offered under different circumstances and the markets in which you choose to invest.
How can ULIP calculators be used effectively for Indian investors?
In order to determine how much profit, you can make, you need to first ascertain how much money you want to and can invest in ULIP plans. Here is a step-by-step guide to using the ULIP calculator to your advantage:
- Start by calculating how much sum assured works best for your loved ones. Take a hard look at their lifestyle and calculate a suitable sum of money that would help them pay for major expenses and daily household expenses for at least a few months.
- Choose a tenure plan. Keep in mind that ULIPs pay death benefits to your beneficiaries in case of unfortunate demise, but they also pay maturity benefits. So, keep the tenure realistic.
- Now, based on the sum assured and the tenure of your ULIP life insurance policy, you will need to pay the appropriate premium. The amount should be comfortable enough for you to invest in ULIP plans without overindulging your current state of finances.
- After you have all the details of the need figured out, enter them into the ULIP calculator. Feed in your age, income, and other personal details that impact your life insurance policy.
- You need to figure out exactly how much return on your investment would benefit you. If you want big returns, then you need to invest in ULIP plans that entail high-risk factors. If you want to earn a little extra money, then ULIP plans with low-risk appetites are better for you. If you want to earn a sufficient sum but are not expecting money to rain on you, you can diversify your investment plan.
- Once you have an approximate return on investment in mind, feed that into the ULIP calculator as well.
- The ULIP calculator will process the possible outcomes to help you realise a realistic sum to invest in premiums. If you feel comfortable investing the calculated sum, then go ahead and finalise the details of your ULIP plan with your insurance provider. If it seems like an overreach, you can recalculate with lesser expectations for returns on your investment. You can readjust your plans till you derive a comfortable solution.
ULIP calculators are excellent tools to help you keep your expectations realistic about the return on investment. You need to find the perfect plan that works to enhance your finances.
Conclusion
The point of ULIPs is to make money from the current market while you set aside the sum assured for your loved ones. If you can manage higher premiums to earn higher amounts from the market, that would be a worthy risk. Remember, ULIPs help you earn money with the help of your insurance provider so you can make smarter decisions with your money.
ULIP calculators help you prepare for the best possible outcomes from your investment. The higher your expectations of returns, the higher risks you need to take. Of course, higher risks can be unnerving at times, but the returns are spectacularly higher than those of low-risk investments. Not to mention, after earning substantial benefits on your premiums during the tenure of your ULIP plan, you will receive a lump sum amount when the policy matures. It is a win-win situation for a long-term plan.
Also Read: Age Calculator | Calculate Your Age Online
