How The NAV Of ULIP Policy Is Calculated?

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How the NAV of ULIP policy is calculated?
ULIP plans are investing your money into the
equity market. It is the same like the mutual
funds, but ULIPs are providing the life cover and
also linked to the insurance policy.
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What is Net Asset Value (NAV) of a policy? NAV
of a ULIP plan is nothing but the book
value. How NAV of ULIP is calculated? NAV or
Net Asset Value is the value of the asset held
by the insurance company after deducting the
various charges like Admin Charges, Mortality
Charges, Fund Management Fees etc.NAV of a ULIP
scheme also varies on a day-to-day basis. NAV of
a particular ULIP scheme can be calculated using
the formula mentioned below
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Just image this scenario that you have a relative
who has just died and you know that he has a life
insurance policy which names you as the
beneficiary but there is a problem. You cannot
find the insurance policy and you do not have a
clue which insurance company sold the policy to
your relative. This might sound frightening but
till happens more often that we want to
believe.Many people find life insurance
policies after death of a relative but it is
always in the future. They are plagued with just
one question -- are they are entitled to receive
the death benefit? Net Asset Value (NAV)
(Market Value of Investments held by the fund
Value of Any Current Assets) (Value of Current
Liabilities Provisions) / Number of units
existing at valuation date (before creation /
redemption of any units)
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Benefits Of ULIP NAV
Unit Linked Plans offer unique opportunity to
combine protection with investments. Some special
features of Unit Linked Life Insurance Policies
(ULIPs) are Provides flexibility in
investments ULIPs offer a complete selection of
high, medium and low risk investment options
under the same policy. You can choose an
appropriate policy according to your risk taking
appetite, coupled with the opportunity to switch
between fund options without any additional
expense for specified number of switches. ULIPs
provide the flexibility to choose the sum assured
and investment ratio in the annual targeted
premium. It also offers the flexibility of one
time increase in investment portfolio, through
top-ups to avail investment opportunity offered
by external environment or own income flows.
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Transparency The charge structure, value of
investment and expected IRR based on 6 and 10
rate of returns, for the complete tenure of the
policy are shared with you before you buy a
product. Similarly, the annual account statement,
quarterly investment portfolio and daily NAV
reporting, ensures that you are aware of the
status of your investment portfolio at all times.
Most companies publish latest NAVs on their
respective websites on a daily basis. Liquidity
To cope with unforeseen circumstances, ULIPs
offer the benefit of partial withdrawal wherein
after 5 years you can withdraw funds from our
Unit Linked account, retaining only the
stipulated minimum amount.
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Disciplined and regular savings ULIPs help you
inculcate a regular saving habit. Also, the
average unit costs tend to be lower than one time
investment. Multiple benefits bundled in one
product ULIP is an outstanding solution for
risk cover, long term investments with the
benefit of various investment opportunities,
coupled with tax benefits. Spread of risk
ULIPS are ideal for those investors who wish to
avail the benefit of market linked growth without
actually participating in the stock market, with
the added benefit of risk-cover.
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ULIP NAV is dependent on the value of the fund.
As the value of fund changes according to market
conditions, the NAV value changes. Hence at the
end of every working day, the fund managers
re-calculate the NAV and post the updated value
on their company website to give customers a
glimpse on the performance of their funds in
market. Thus, you can conveniently track the Ulip
NAV of your fund.
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