If you have invested in a ULIP scheme (or are planning to do so), you might have had a few nagging concerns! They could be, “What’s my risk appetite?” or “How do I track my ULIP over time?” Getting the answers to these questions will ease your curiosity and put your mind at rest before taking action.
Remember that childhood lesson you learned – “Look before you leap.” It wasn’t just for fun; it’s good advice to avoid confusion and surprises later! To save yourself from the discomfort of an unclear ULIP scheme, you need to know how to track and manage it to avoid any mess.
This post will help you do just that – guide you through the steps of tracking and managing your ULIP efficiently so that you can leap with confidence!
What to Keep in Mind Before Selecting a ULIP Scheme?
You must keep some important factors in mind before you choose the right ULIP scheme:
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Consideration |
Details |
| 1. Understand Your Financial Goals | Define your financial goal (retirement, children’s education, wealth accumulation) to select the right investment strategy and life cover. |
| 2. Choose the Right Fund | Equity Funds: Higher growth potential but higher risk. Debt Funds: Safer, stable returns, ideal for conservative investors. Choose based on your risk appetite and goal. |
| 3. Select Life Insurance Coverage | Choose a life cover that’s sufficient to meet your family’s financial needs in case of unforeseen events. |
| 4. Lock-in Period | ULIPs have a 5-year lock-in period. Stay invested for longer to benefit from compounding returns. Surrendering early may lead to penalties. |
| 5. Stay Updated on Market Trends | Regularly monitor market trends to adjust your investment strategy and optimise returns by reallocating funds as needed. |
| 6. Be Aware of Charges |
Understand the charges involved:
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| 7. Choose a Suitable Payment Option |
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| 8. Fund Switching Flexibility | ULIPs allow you to switch funds (equity, debt, hybrid) to optimise returns. Understand the cost of switching and free switches, and calculate fund performance before switching. |
Know How to Track Your ULIP Over Time
Let’s now learn the simple methods of tracking the performance of your ULIP. This way, you stay on the same page regarding your investment and plan your financial goals accordingly. Here below are the key steps you need to keep practising:
1. Calculate the Net Asset Value (NAV)
The first thing is to calculate ULIP’s NAV and compare it with the initial NAV. This will give you an idea of the absolute return value of your investment.
2. Use an ULIP Calculator
A trustworthy online ULIP calculator can help you to track your policy’s performance easily. You need to enter your premiums and the duration for which they are paid, along with some other details.
3. Monitor Periodic Statements
Mostly, the insurance companies provide regular statements that have the details of your ULIP’s fund value, NAV, etc. You need to thoroughly review them in order to remain updated on how your investment plan is performing.
4. Evaluate Fund Performance
Closely assess the performance of the specific funds in which your ULIP usually invests. Examining their past growth and risk variables throughout different periods in time is worthwhile.
5. Compare with Benchmark Indices
Benchmark indices like NIFTY or Sensex are useful for you to compare with your ULIP’s returns. This enables you to assess the performance of your funds in relation to market trends.
6. Understand the Charges
ULIPs carry a number of costs, including policy administration, fund management, and premium allocation. Identify these deductions and what effect they have on your entire returns.
7. Track via Online Portals
Numerous insurance providers provide online portals with up-to-date information on the performance of your ULIP. You may access fund valuations, transaction histories, and other crucial information through their websites.
8. Seek Expert Advice
In case you have any trouble evaluating the success of your ULIP, you can speak with insurance agents or financial specialists. They can provide insightful information on fund selection, market movements, and modifying your plan in accordance with your objectives.
9. Reassess Your Goals Periodically
Review your risk tolerance and financial objectives on a regular basis. In the context of such things, you might wish to change funds or modify the amount of your premium so it fits your changing goals.
Summing Up
So, now you’re all set with the know-how of choosing the right ULIP scheme and tracking its performance. Take the right approach to be able to leap with confidence and watch your investment’s impressive growth. Invest in peace!
FAQs on ULIP Scheme Tracking
1. How to check ULIP return?
You can check the ULIP return by doing calculations based on the Net Asset Value of the fund. The Net Asset Value is easily calculated by dividing the total number of units held by investors by the value of the fund’s assets, removing its liabilities.
2. Is ULIP better than FD?
Indeed, ULIPs offer better investment opportunities than FDs. They offer you life insurance and guarantee the security of your funds. Also, they provide you with the opportunity to profit from investments. They are among the top spots to invest in because of their adaptable nature.
3. What is a ULIP calculator?
An insurance seeker can use this customised online tool (ULIP calculator) to compare various ULIPs. It helps them determine the maturity amount based on the amount they spend over a selected time period.
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