What is the Estimated Return Percentage on ULIP? Do Investors Get Compound Interest?

 

In this policy, the investment risks in the investment portfolio is borne by the policyholder

The market offers options aplenty to fit your short-term and long-term investment needs. But before you leap picking a plan, it’s extremely important to identify your goals and figure out the exact expectations from your investment. If you are looking for a long-term goal, a long-term investment with the best returns is surely your answer.

Here, Unit Linked Insurance Plan (ULIP) plan can be a lucrative tool as it relies on the power of compounding to bring you the best returns. To be on the wiser side, you can always trust the ULIP calculator to estimate the returns for you before you take the plunge.

The gains from ULIP 

The worth of any investment is based on its estimated returns which make it stand out among the various options available. ULIP plan has garnered quite a lot of popularity because it doubles up as life insurance and an investment opportunity, ensuring a two-sided financial gain thereby.

Here a part of the premium goes to form the life cover and the remaining is invested in debt funds, equities or a mix of the two. Thus, while it supports the family of the policyholder in case of his untimely demise with a lump sum death benefit, the maturity benefit consists of a pay back of total premiums paid along with the returns from the investment in market linked funds. This dual benefit thus makes ULIP a worthy choice among investors.

The estimated return percentage

With a five-year lock-in period, the ULIP plan performs best when the investor continues with it for at least 10 years or more. Experts suggest, when a policy holder keeps his money invested in the ULIP policy without making any withdrawals, it can generate even up to 10-12% returns depending on market condition and fund performance.

The power of compounding

The higher return from a ULIP plan is the fruit of the power of compounding. The investment in ULIP offers compound interest i.e., the interest generated every year is added to the principal and the entire amount gets reinvested for the following year, increasing the net worth of your fund. Thus, the longer you invest in the plan or keep your money invested, the higher the return.

ULIP calculator

Calculating how much return you can expect from your ULIP plan is right there at your fingertips. Almost all the plan provider companies provide an online tool called the ULIP calculator that is available on their respective websites.

The ULIP calculator estimates the returns from a particular plan given the premium amount and the tenure of investment.  Besides, if you’ve already zeroed into an amount, you are looking for after you invest for a certain period, the ULIP calculator can also estimate the amount of investment needed to achieve it.

Moreover, if you are confused about making the right pick from all the available ULIP plans, the insurers have solutions for that too. Some ULIP Calculator offer an option to compare the returns from different ULIP plans and help in choosing the one best suited for your needs.

Everything said, it’s now time for you to take your pick of the investment plan. Make sure you choose the right one!

Related Articles:

• Current Trends in ULIP Investment in 2023
• Scared to take investment risks? ULIP can still be your pick!
• Why a Unit-Linked Plan is Must for Stable Fund Generation?
• What is ULIP Plan?
• Best Term Insurance Plan
• ULIP Tax Benefits - Tax Saving Investment Option

ARN - ED/07/23/3246