Good finance acts as a backbone for the family. At different stages of life, one might need different amounts of money. It is an obvious reason why investing in different investment plans is a thing. An individual may need finance for children’s educations, home loans, retirement planning, etc.
Thus, when someone spends on investment, they can use this fund whenever required. There are so many insurance companies that offer investment facilities. As a result, it is a task to choose the best investment option amongst the many others. One can choose the best investment plans as per need and choice. It is always better to calculate premiums using an investment calculator before finalizing any investment plans, yielding better benefits when required.
Image Courtesy: Shutterstock
An investment calculator is a helpful tool for investment planning. Before one could start calculating and deriving important information using an investment calculator, one must know which plan to choose and how much amount to invest.
What Are Investment Plans?
In general terms, investment plans are instruments that let an individual build his wealth by spending some amount. In this, an individual needs to pay a certain amount of premium each month to reserve a subsequent amount of savings. And this premium can be calculated beforehand with the help of an Investment calculator.
One can keep depositing premium monthly in an investment plan and see the money growing while they sit back, and they can later get the total amount of the investment plan when the right time comes.
The different insurance companies provide different investment plans and products. An individual must always conduct proper research and planning before choosing a suitable plan for him and his family. Making it even more important to choose a perfect investment plan from so many available options.
How Do Investment Calculators Help Planning Investment?
While choosing the best investment plan, individuals often get confused about which plan to choose. There are several factors that affect this decision. Firstly, the investment calculators help you determine the actual period you must require for an investment plan. Secondly, it can further help analyze the total amount you need to spend on an investment. And finally, it helps determine several things, some of which are:
- Initial Amount Of Investment
This is a starting amount that an individual needs to pitch in at the initial period of obtaining an investment plan. This can also be termed as the principal amount. This is generally a huge amount that is essential for any investment. A calculator helps detect this amount so that individuals can plan for this fund.
- Rate Of Return
Different insurance companies may provide different rates of return for different investment plans. A calculator helps detect this rate of return so that a comparison of different plans can be made to find out the most suitable investment plan.
The rate of return is also often decided by the government that changes from time to time. Life insurance plans also help enjoy rebates in taxes, and a calculator can also help choose the best investment plans for income tax rebates.
- Investment Tenure
With the help investment calculator, one can calculate how many years they need to invest in order to get a good return. The insurance plan works on a simple concept of computing. In order to receive a good amount at the time of maturity, you need to invest for more period of time. A calculator helps detect this tenure for an individual depending on various factors.
- Ending Amount
An Investment Calculator helps you analyze the actual amount you will be getting after investing in a particular plan for a fixed tenure. An individual can have their preference of how much amount they need at the maturity period. And the calculator helps in determining how much premium one needs to pay monthly to attain that approximate amount at the time of maturity.
- Other Expenses
Every investment plan includes various other and added expenses. The calculator helps you detect these expenses for a financial investment plan. You can get an approximate estimate of the actual amount that will be required for an investment plan. The cost of these add-ons ensures you with several add-on benefits. An Investment calculator makes it easier to choose the right investment plan. It helps individuals decide how much they should spend on an investment plan to enjoy its maximum benefits at times of need. It works in a simple format that anyone can relate with and calculate all the information related to investment planning by entering some basic information.