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

Updated On May 25, 2021

Calculation of Returns on Insurance Policies
Best Investment Plans In India

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