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 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 work for assessing the functionality of a ULIP 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 in which you want the investment to happen. Basis your investment preference and risk-appetite you can either 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 has the potential of creating 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 - ULIP offers the 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 purpose. Add-on investments through single premium additions can aid in a gradual creation of wealth.
- ULIP tax benefit1 - 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 of the sum assured or the fund value. Your family receives the death benefits on the demise. Hence, ULIP extends financial support during unfortunate times. Besides, the death proceeds are tax-free1 under Section 10 (10D).
ULIP Products with Tata AIA
We, at Tata AIA, understand the importance of insuring 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^:
Each plan is unique to suit your custom requirements. You may seek the proficient advice of a Tata AIA consultant to choose the best-suited plan.
What is a ULIP Calculator?
A ULIP calculator is a customized computing tool. It aids in knowing the expected future value of the investments. Besides, it may also support a comparative analysis between the different ULIP plans.
Why Use a ULIP Calculator?
A ULIP calculator aids in calculating the ULIP premium amount. It also helps in comprehending the anticipated returns from the investment. Considering the amount of 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 amount 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 at providing the anticipated gains with due transparency.
- Flexible - The calculator is user-friendly, as it allows 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 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.
- Insurance cover is available under the products.
- Unit Linked Life Insurance products are different from traditional insurance products and are subject to risk factors. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.The fund is managed by Tata AIA Life Insurance Company Ltd. (hereinafter the “Company”).
1Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to yo
- The products are underwritten by Tata AIA Life Insurance Company Limited. The plans are not guaranteed issuance plan and it will be subject to the Company’s underwriting and acceptance.
- For more details on risk factors, terms and conditions please read the Sales Brochure carefully before concluding a sale.
- This document is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. This document is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
- Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
- Every effort is made to ensure that all information contained in this document is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
- The linked insurance product does not offer any liquidity during the first five years of the contract. The policy holder will not be able to surrender/withdraw the monies invested in linked insurance products completely or partially till the end of the fifth year.
Tata AIA Life Insurance Company Limited (IRDAI Regn. No.110 • CIN: U66010MH2000PLC128403). Registered & Corporate Office: 14th Floor, Tower A, Peninsula Business Park, Senapati Bapat Marg, Lower Parel, Mumbai - 400013. Trade logo displayed above belongs to Tata Sons Ltd and AIA Group Ltd. and is used by Tata AIA Life Insurance Company Ltd under a license. For any information including cancellation, claims and complaints, please contact our Insurance Advisor / Intermediary or visit Tata AIA Life’s nearest branch office or call 1-860-266-9966 (local charges apply) or write to us at email@example.com. Visit us at: www.tataaia.com.
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