The current pandemic has yet again shown the volatility and uncertainty existing in life. While you can never predict uncertainties, you can combat them to some extent. This requires a prudent financial plan. Insurance and investments are two key aspects of planning. Both are attainable through a single financial product - Unit Linked Insurance Plan (ULIP). ULIP policy is a dual product offering a mix of insurance as well as investment.
A fair understanding of the premium amount and the anticipated returns aids in making calculative investment decisions. It is thus important to comprehend how ULIPS works for assessing the functionality of a ULIP plan calculator.
How does ULIP Plan Work?
ULIP provides twin advantages through a single financial product. A part of the premium is set aside for covering your life. And, the other part gets invested in mutual funds. You can choose the fund type you want the investment to happen. Based on your investment preference and risk appetite, you can opt for equity, debt or mix of both. You then receive units in proportionate to the investment made. The performance of the units may be tracked through its Net Asset Value (NAV).
Thus ULIP plan has the potential to create a corpus over time and can support long-term investment objectives. You may consider ULIP for planning your retirement, children’s education, or their marriage.
What Are The Benefits of ULIP Policy?
Apart from the dual offerings of insurance and investment, there are other benefits of investing in ULIP.
- Ability to Switch Investing Schemes - If you have chosen to invest your funds in equity today, you can change the fund type subsequently. Hence ULIP allows you to revise your investment strategy in line with your changing goals and preferences. Besides, switching up to a certain number of times are free of any charges.
- Part Withdrawals - Online ULIP offers a partial withdrawal facility, on completion of the five-year tenure. Subject to certain charges, you can withdraw a part of the funds in case of any emergencies or unplanned events. The balance units in the plan continue to exist as the plan remains active.
- Additional Investments - You can make additional investments through top-up premiums. Hence you can use idle funds over and above the premium amounts for investment purposes. Add-on investments through single premium additions can aid in the gradual creation of wealth.
- ULIP tax benefit - The premium amount is allowable as a deduction subject to the permissible limits under Section 80C of the Indian Income Tax Act. Besides, the compliance of Section 10(10D) exempts the maturity proceeds of the plan.
What is the Death Claim Payable in Case of ULIP?
Death claim normally comprises the sum assured or the fund value. Your family receives the death benefits on the demise. Hence, ULIP policy extends financial support during unfortunate times. Besides, the death proceeds are tax-free1 under Section 10 (10D).
ULIP Products with Tata AIA
Every assessment year you are required to file for your tax returns by July 31. However, the earlier you start your income tax filing process, the sooner you can get the excess Tax money reversal.
What is the TDS Refund Process?
We, at Tata AIA, understand the importance of ensuring your life and generating wealth. So, we offer a range of ULIP products that help you get the dual benefit of insurance and wealth creation. Following are our ULIP offerings^:
- TATA AIA Life Insurance Fortune Maxima (UIN - 110L113V03) - This plan extends whole life coverage along with the potential of a market-driven growth.
- TATA AIA Life Insurance Fortune Pro (UIN - 110L112V04) - The plan provides flexibility in the policy term.
- TATA AIA Life Insurance Wealth Maxima (UIN - 110L114V03) - A plan offering whole life coverage for the financial security of your loved ones.
- TATA AIA Life Insurance Wealth Pro (UIN - 110L111V03) - This plan gives you the liberty to choose your investment tenure and terms of premium payment.
- TATA AIA Life Insurance Smart Sampoorna Raksha (UIN: 110L156V01) – This plan makes your money grow steadily over time with choice of multiple funds and also provides adequate life cover to your loved ones.
Each plan is unique to suit your custom requirements. You may seek the professional advice of a Tata AIA consultant to choose the best-suited plan.
What is a ULIP Calculator?
A ULIP plan calculator is a customized computing tool. It aids in knowing the expected future value of the investments. Besides, it may also support comparative analysis of the different ULIP plans.
Why Use a ULIP Calculator?
A ULIP return calculator aids in calculating the ULIP premium amount. It also helps in comprehending the anticipated returns from the investment. Considering the premium and the policy tenure, it computes the expected returns from the ULIP plan. Besides, some calculators also aid in undertaking comparative analysis.
Hence, you can choose the most suitable plan using the ULIP calculator. It is a beneficial tool for determining the probable funds of investments needed for achieving your financial goals.
What are the Key Features of a ULIP Calculator?
- Transparent - The returns vary according to market performance. However, the calculator aims to provide the anticipated gains with due transparency.
- Flexible - The ULIP calculator is user-friendly, allowing you to change the premium amount and policy tenure. This aids in knowing the probable returns under different scenarios.
- Supports Investment Decision - The calculator computes the returns under various investment scenarios. A comparative analysis enables in choosing the most appropriate investment plan. Hence, a ULIP return calculator supports in making an informed investment decision.
How to Use a ULIP Calculator?
- The calculator shall ask you for some factual details. These include your date of birthday, gender and smoking habits.
- Thereafter, punch in the details about the planned ULIP investment. Mention the amount of premium you are willing to pay. Keep in mind your current financial income and obligations while mentioning this amount. You also need to choose the periodicity of investment, i.e. monthly, quarterly, bi-annually or annually. Next, select the tenure of the period for which you would like to stay invested. Your financial objectives influence these inputs.
- Finally, opt for the fund type for investment. You may choose the investment option in line with your preferences.
- As an output, the calculator returns the anticipated future value of your investments.
Hence, on evaluating the quantified results, you can invest in the ULIP plan of your choice.
Investing in ULIP has an added advantage of gradual wealth creation. Using the ULIP calculator is beneficial in making a well-versed investment decision. Thus besides the primary objective of covering your life, ULIP can support in fulfilling your long term financial objectives.