Life insurance: How To Calculate Returns On Life Insurance Policies?
Table of Contents
Most term insurance policies do not provide any returns but ULIPs and endowment plans do. ULIP is a Unit Linked insurance plan which provides market linked returns along with life cover and endowment plans are basically savings plans which ensures gradual increment in your savings. Individuals can choose the plans based on their features and risk appetite. Calculating returns on insurance policies is a bit more complicated than returns on bank accounts due to fluctuating bonuses and charges.
Calculation of Returns on Insurance Policies
To calculate returns on an insurance policy, an individual has to keep up with all the details related to the plan. These following steps can be followed to calculate returns on your insurance policy:
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Read the policy documents
First step under the calculation of returns on investments is to read the crucial details of the policy such as charges applicable, bonuses and premium etc. After assessing the policy documents, make a table that shows:
Year |
Premium |
Charges |
Final Amount |
Bonus |
Balance |
-
Calculate Charges
Different plans offer different charges and perks, these particulars must be accurate to calculate reliable returns. Further, you have to subtract all the charges levied under the plan from the amount of premiums paid for the year. Add any interest or bonus applicable under the plan. The amount obtained will be the return made on any particular insurance policy. The individual has to continue with the calculations for the following years.
You may also like to read:- Different Types of Life Insurance Plans in India
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Add Variable Additions
The last step is to add the guaranteed additions offered by the insurance policy to reach the investment decision.
Best Investment Plans In India
The following are some of the best plans to invest in India:
Investment Plan |
Plan Type |
Entry Age |
Maximum Maturity Age |
Policy Term |
Fund Options |
Aegon Invest |
ULIP |
7-55 years |
70 years |
10/15/20/25 years |
5 |
Aviva Igrowth |
ULIP |
18-50 years |
60 years |
10/15/20 years |
3 |
Bajaj Future Gain |
ULIP |
1-60 years |
70 years |
10-25 years |
7 |
Bharti Axa Efuture Invest |
ULIP |
18-60 years |
70 years |
10 years |
6 |
Bajaj Allianz Future Gain |
ULIP |
1-63 years |
70 years |
7-30 years |
7 |
Bajaj Allainz Retire Rich |
Unit -linked Pension Plan |
30-73 years |
80 years |
7-30 years |
3 |
Canara HSBC Smart Monthly Income Plan |
ULIP |
18-50 years |
- |
5-30 years |
7 |
Edelweiss Tokio Guaranteed Income Plan |
ULIP |
0-60 years |
70 years |
5-25 years |
7 |
Exide Life Wealth Maxima |
ULIP |
0-65 years |
75 years |
10/15/20 years |
6 |
HDFC Click2 Invest |
ULIP |
30 days- 65 years |
75 years |
5-20 years |
8 |
ICICI Pru Smart Life |
ULIP |
20-54 years |
20-64 years |
10-25 years |
8 |
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Also read
10 Most Common Life Insurance Questions
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.