One of the most significant aspects of financial planning for most responsible parents involves children’s education. Opting for a child education allowance is optional for most, while several government employee parents enjoy reimbursement of various fees till 20 years of age of the concerned child.
However, such facilities are enjoyed by only a few. The majority needs to critically plan for their children’s future in advance. Considering the steep inflation rate in the education sector, you need to plan your strategies carefully to enjoy optimum returns to fulfil your targets with ease. This requires careful planning.
ULIPs can save your day in this respect if invested correctly with proper planning.
What is ULIP?
ULIP or Unit Linked Insurance Plan is a strategic investment tool, allowing dual benefits of both market-linked investments and returns along with insurance coverage protection. A part of the premiums paid towards your plan gets invested towards insurance, while the rest gets invested in market-linked funds of your choice, like debt funds, equity funds, or balanced funds.
What is a ULIP calculator?
A ULIP plan calculator is a handy online digital tool that eases your investment planning strategy, ensuring you enjoy a more customised approach. You can enter your preferred return on investment, investment tenure, and your comfort risk. After you enter these details, you can make a comparative study among several competent plans and proceed to invest in the most suitable and rewarding one.
This user-friendly tool offers a clear insight into the probable outcome of your planned investment based on the details entered.
How does the ULIP calculator work?
Before you can understand the utility of a ULIP calculator, you must understand how a ULIP calculator works. This is an easy digital tool that aids you in determining the probable outcome of your planned investment as you enter certain specific details.
You need to enter the basic details like the amount of investment, investment tenure, and the premium payable amount. You can even enjoy the option to distribute the premiums to various market-linked assets based on your financial targets and risk appetite to maintain a diversified portfolio.
The formula that it follows:
[(Current NAV – Initial NAV) / Initial NAV ] X 100.
To calculate the ULIP CAGR, which estimates the compounded annual growth, the formula is :
[{(Current NAV /Initial NAV) ^ (1/Number of years)} – 1] X 100
With this calculator, you can even compare several plans and make your investment decision accordingly.
Why use a ULIP calculator?
The ULIP plan calculator plays a significant role in investment planning. Some of the major advantages of the ULIP calculator include the following:
1. Financial planning:
Financial security is extremely crucial to ensure a secure future. A ULIP calculator provides a clear insight into the probable outcome of your investments based on your circumstances, ensuring a clear financial portfolio.
2. Goal set:
To enjoy a successful financial future, setting easily achievable goals is very crucial. A ULIP plan calculator aids in prioritising your investments for long term, be it post-retirement planning, funding children’s education, marriage, buying a property, etc. This tool aids in optimising your overall financial growth.
3. Investment comparison:
A ULIP calculator ensures easy evaluation of probable investment options based on the type of ULIP chosen. You can make a critical comparative study among several competent ULIPs and make your choice based on the results of the ULIP calculator.
4. Risk assessment:
Controlling and comprehending risk is very crucial to ensure financial security. The ULIP calculator aids you in discovering the perfect combination for returns and risk based on your investment portfolio by comparing the risk tolerance capacity of various ULIPs.
5. Flexibility analysis:
Handling unforeseen financial emergencies requires a crucial assessment of the individual’s adaptability. You can easily compare the basic features of various ULIPs using the ULIP calculator, like the flexibility for altering funds, adding riders, amending the premium payable amount, etc., to ensure that your investment strategy is competent enough in meeting your changing requirements etc.
6. Investment monitoring:
The ULIP plan calculator is also a crucial monitoring tool that aids your investments. You can utilise this tool to monitor the overall returns of your investments based on actual figures. Based on the results, you can make the necessary additions and alterations to ensure optimum returns.
How to use the ULIP calculator?
ULIP calculator is a user-friendly tool that can be used very easily. You need to follow these few steps:
- Visit the official site of your preferred insurance provider.
- Enter your details like name, age, contact details, etc., as required.
- Choose the investment frequency based on your preference
- Enter the specific investment duration by entering your planned investment tenure.
- (Pro tip: Longer durations yield better returns due to the power of compounding.)
- Enter the expected return rate percentage. Try to maintain a realistic approach, considering the market trends and your investment approach.
- Enter the desired amount that you desire to invest. This can either be a lump sum or a pre-determined periodic sum.
- Follow the directions as required and click “Check” or “Submit”.
- You will discover the results instantly.
Conclusion
To ensure concrete inflation-proof financial planning, the ULIP calculator is indispensable. You can compare the returns of several plans and make your choice to enjoy optimum rewards.
