Articles 315 views December 17, 2021

People call Virat Kohli, one of the most popular cricketers in India and worldwide, the ‘Chase Master’ because they believe he has a calculator that helps him plan his chase to perfection. Similarly, to dominate on the financial pitch, you need to use calculators to plan and execute. Your investments will work only when you know how much to invest and for how long. Plus, the term insurance plan you choose should have adequate coverage for your dear ones to live peacefully in your absence. Sounds tricky, but with the help of financial calculators, you can sort all that. Let’s check out the different financial calculators you should use to stay financially fit.

Here’s a List of Financial Calculators You Should Use

Calculators can be of various types depending on the type of financial instrument you choose to put your money in. If you want to invest in life insurance cum investment plans, you can use the ULIP Calculator, Retirement Planning Calculator, etc. Whereas for mutual funds, you can use both lump sum and SIP calculator. Term insurance calculator will tell you how much coverage you need for your dependents. Similarly, other calculators too help you plan your finances. Let’s check out all these one after another.

How Does the ULIP Calculator Help Achieve Your Financial Goals?

The ULIP Calculator helps calculate the returns on ULIPs, which offer a unique combination of insurance and investment. All you need to do is enter the monthly investment amount, the time for which you wish to stay invested, and the expected rate of return. The rate of return on ULIPs varies based on the fund you choose to invest in.

Yes, ULIPs come with a choice of – equity, debt and hybrid funds. The rate of return, which depends on the performance of these funds, is not fixed. It can be in big double digits when investing in equity funds. Whereas debt funds would come with conservative returns of around 8-9% per annum. Lastly, hybrid fund returns would depend on which side – equity or debt – the investment is titled more. In the case of equity-oriented investments, returns can be 10-12%, whereas debt-oriented investments could fetch you around 8-10% per annum.

To figure out the right investment amount, have an idea of how the inflation trajectory would pan out in the years to come. Add 5-6% to your annual expenses and do so for the time you want to stay invested. See the number that comes and experiment with different figures of the investment amount in the calculator. You will get to know the amount needed to be invested. In case your budget does not allow such an investment amount, extend your premium paying term. The extension will help decrease the monthly investment amount required to accomplish the goal corpus.

Retirement Planning Calculator

You would want your retirement days as good as your working days. What may come as a challenge to ensure the same is the lack of regular income you might witness at that stage. However, you can avert all these through the retirement planning calculator while you’re working. The calculator, which is available online, requires you to mention a few details – current age, life expectancy, expected inflation rate, expected investment return rate during both pre- and post-retirement times. Let’s check the table below to know the estimated amount you need to invest to accumulate the required retirement corpus.

Investment DetailsFigures
Current Age30 Years
Expected Retirement Age60 Years
Life Expectancy80 Years
Monthly Income Required During Retirement Days1,00,000
Expected Inflation Rate6%
Expected Return Rate on Investment Before Retirement15%
Expected Return Rate on Investment After Retirement6%
Yearly Income Required Immediately After RetirementINR 68,92,189
Additional Corpus Required for RetirementINR 1,31,22,262
Monthly Investments Required to Achieve the CorpusINR 1,895

In case you start investing late, you will need to put in more.

Mutual Fund Calculators

Mutual funds, which distribute your money across a plethora of financial instruments, come with two modes of investment. Either you can put in your investments using the popular Systematic Investment Plan (SIP) or opt for a lump sum method. You can use the respective calculators to compute returns. In the case of equity funds, keep the expected rate of return to around 12-15%. Whereas for debt funds, you should expect the return to be around 7-9%. Hybrid fund investments would lead to returns above debt funds and less than equity funds. However, returns are not fixed as they are based on investment risks.

Term Insurance Calculator

Term insurance is the most affordable insurance product yet it gives much higher coverage than others in the insurance segment. The premium remains fixed throughout the policy term; so if you book a deal at a young age, you could save a lot. Besides, the premium calculation also depends on your gender and health status. Women policyholders and non-smokers get concessions on premiums.

Besides premium, you should set your sights on the sum assured that your family would receive in case of your absence. Much like the retirement planning calculator, the term insurance calculator takes into account inflation rate, life expectancy, current as well as future income & expenses.

An Illustration of Term Insurance Calculator

If you want term insurance for 20-30 years, ensure the sum assured remains 3-4 times the current monthly expenses. If your current expenses amount to INR 40,000, you will need INR 1,20,000 monthly after 20-30 years. Yearly, it goes up to INR 14,40,000. In case you are 30 years old, you would want your family to be covered for another 30 years. After that point, your kids will have jobs and can take care of themselves. Taking all those probabilities into account, the sum assured should be more than INR 1 crore. Go online to see which insurance companies offer you the same and at what premium. Lock the deal with the insurer offering you that sum assured by charging premiums affordable to you.

Health Insurance Calculator

Health insurance, which offers you financial protection amid unexpected health emergencies, is available at varied sum insured and premium amounts. The premiums are calculated based on your age, the number of members covered under a plan, the type of plan – individual or floating, health conditions, etc. Someone buying a health insurance plan at a young age and has no health issues would get a cheaper premium deal compared to someone doing later and is fraught with health problems. Whereas, a floating health plan, which covers you as well as your family members, too comes at a lower price, provided the age of the eldest member is not much. An individual plan will have a greater premium.

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