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Life insurance: How To Calculate Returns On Life Insurance Policies?

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:

  • 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

  • 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

Must Check

Term Insurance Company

Term Insurance Benefits

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.        

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