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# Unit Linked Insurance Plan (ULIP) Calculator

## How to Calculate ULIP Returns?

There are two ways of measuring one’s ULIP returns. Illustrated below are both of these, along with the formulae:

1. Absolute Returns

Absolute returns of a ULIP investment refers to the increase in the value of its assets over a period. It can be negative, indicating depreciation, or positive, which signals an appreciation in the asset value.

If you are willing to calculate the absolute returns of a scheme, the only values you need are its initial NAV and current NAV.

Given below is the formula for calculating the same:

[(Current NAV – Initial NAV)/Initial NAV] × 100

The table given below will make the working of the above formula simple for you. In this example, consider the initial NAV to be ₹250, current ULIP NAV as ₹350. Hence, the absolute return will be 40% in a year.

 Parameter Value Initial NAV ₹250 Current ULIP NAV ₹350 Absolute returns 40%

2. Compounded Annual Growth Rate (CAGR)

Compounded annual growth rate is an indicator of an investment’s annual growth over a certain time period. There is a mathematical formula for calculating CAGR for ULIP, which uses a scheme’s end value, beginning value, and the number of years of investment.

This formula is as below:

{[(Current Value of NAV/Initial Value of NAV) ^ (1/Number of Years)] – 1} x 100

Going through the below-mentioned table will enable you to easily understand the working of the above formula. In this example, consider the initial ULIP NAV to be ₹25, and after five years the current ULIP NAV is ₹35. Hence, the CAGR in this case will be 6.96%.

 Parameter Value Initial NAV ₹25 Number of years 5 Current NAV ₹35 CAGR 6.96%