ULIP basically stands for Unit Linked Insurance Plan. ULIPs is a hybrid form of investment plan that allows you to segregate the funds you invest. The funds that you invest go towards investment into equity, debt, or both & the remainder of the sum goes towards covering your life. This is why ULIPs are an attractive investment opportunity.
In order to calculate the insurance premiums that you would be paying for the ULIP that you invest in & the returns you would be earning on the same, you can start using a ULIP calculator. A ULIP calculator is a simple tool that provides you with enough clarity on the policy that you would be investing in.
Here is everything that you should know about a ULIP calculator:
- Why use a ULIP Calculator?
With the plethora of ULIP options available in the market, an average investor would be sunk in the choices they need to make in order to get the best plan that is suited according to their financial needs. However, the focal point of the ULIP calculator is to prevent that. It helps the investors to gain an idea about the investment & returns and the premiums they need to pay & helps them with their short-term & long-term goals.
- Step to use a ULIP calculator:
- Log on to the ULIP calculator website.
- Once the investor has logged in, they need to enter all the details of the monthly investment amount they want to invest.
- The next step is to select the frequency of payment. You could either invest a lump sum or invest monthly or invest quarterly or invest annually. This is one of the essential steps while working on the ULIP calculator.
- The next step while working on a ULIP calculator is to decide the tenure. Then you can move towards determining a proportion of the sum that will go towards your investment.
- The minimum lock-in period that you can invest in for ULIP on a ULIP calculator is five years. According to investment professionals, a lock-in period of more than five years or atleast an investment for a longer duration can help with reaching your financial goals.
- The next step includes the determination of funds in which the investor wants to park their money. The investors can choose to invest in equity instruments, debt fund or a combination of both investment instruments. However, before making the investment in any ULIP plan, you need to determine what sort of track record the ULIP has. This track record will help you determine its performance, and the ULIP calculator will also help you out with this. In order to gain profitable returns on investment, it is always advisable to invest in funds which have performed well in the market in the past three years.
A ULIP calculator is simple & easy to use. It is free of cost and is available to you quickly. Investors looking forward to investing in ULIPs need to consider inflation rates so that they do not lose out on the money they invest and their wealth grows.