Returns on endowment policy vs. inflation calculator
Welcome to this, our returns on endowment policy vs. inflation calculator. What this calculator will do for you is to give you the answer to the question - "Is my endowment policy creating wealth for me, by beating inflation?" For an investment product to be worth its name, it needs to give a positive inflation-adjusted return. Or, as we mentioned above, it has to beat inflation.
The calculator begins by asking you to select the type of premium you want to pay - single, regular, or limited. That done, the next screen will ask you to fill in some critical data - your age, your sum assured, your mode of paying premiums (monthly, quarterly, semi-annually, annually), annual premium amount, and policy term. Endowment policies are typically issued only within an age bracket. This is also taken into account here. The age range defined here is 12-75. We arrived at this by taking the lowest and highest ages at which any insurer issues an endowment policy.
After crunching the numbers you have fed, the calculator gives you the final screen. It is a very simple, effective bar chart that tells you if your endowment is indeed beating inflation or not. The calculator assumes a base inflation value of 6% and a base average yearly expected bonus of 6% as well, while doing the calculation. So long as the bar on the right is green, your endowment policy is beating inflation. The moment the bar on the right turns red, it means inflation will wipe out any returns from your endowment policy. A couple of sliders, one each for the inflation rate and the average yearly expected bonus, allows you to play around, change them, and see how these changes affect your returns when compared to inflation. In short, you have complete freedom.
You will find that this calculator is a boon to you while you are reviewing your finances. During periodic reviews of your personal finance portfolio, this calculator will help you determine if your endowment policy is still beating inflation or not. That in turn will allow you to review your insurance needs thoroughly.
Note: All calculators and comparators are made based on certain assumptions which may not be true in your case. You should consult your personal financial advisor before taking any decision. Apnaloan disclaims any responsibility for any decision taken based on these calculators and comparators.