About the Insurance vs Investment Comparison Calculator
What is the Insurance vs Investment Comparison Calculator?
Traditional policies mix insurance and investment and usually return 4–6%. This calculator compares an endowment vs term plus sip strategy on the same yearly outlay.
It also works out the policy's effective return (IRR) from its maturity value.
How to use the Insurance vs Investment Comparison Calculator
- Endowment / Money-back / ULIP Premium (₹ a year) (sample: 1,20,000)
- Premium Paying and Policy Term (years) (sample: 20)
- Maturity Value Quoted (₹, 0 = use return below) (sample: 0)
- Policy Return if No Quote (% a year) (sample: 5)
- Term Premium for the Same Cover (₹ a year) (sample: 12,000)
- Return on Mutual Funds (% a year) (sample: 11)
- Apply 12.5% LTCG Tax on Fund Gains? (sample: Yes)
- Press Compare Policy vs Term + Invest (results also refresh as you type). The result card shows the Extra Wealth with Term + Investing, along with Policy maturity value, Term + investing corpus after tax, Amount invested each year and Policy's effective return (IRR).
Formula used
Term + SIP corpus = FV of (Policy premium − Term premium) at fund return, less LTCG tax
- LTCG tax = 12.5% on equity fund gains above ₹1.25 lakh
Worked example
These are the sample values already filled in the calculator above, and the result it returns for them:
| Input | Sample value |
|---|---|
| Endowment / Money-back / ULIP Premium (₹ a year) | 1,20,000 |
| Premium Paying and Policy Term (years) | 20 |
| Maturity Value Quoted (₹, 0 = use return below) | 0 |
| Policy Return if No Quote (% a year) | 5 |
| Term Premium for the Same Cover (₹ a year) | 12,000 |
| Return on Mutual Funds (% a year) | 11 |
| Apply 12.5% LTCG Tax on Fund Gains? | Yes |
| Result | Value |
|---|---|
| Extra Wealth with Term + Investing | ₹28,53,871 |
| Policy maturity value | ₹41,66,310 |
| Term + investing corpus after tax | ₹70,20,181 |
| Amount invested each year | ₹1,08,000 |
| Policy's effective return (IRR) | 5% |
| LTCG tax on fund gains | ₹6,76,454 |
| Note | Policy maturity from endowment plans is usually tax-free if premiums stay within limits; term cover also protects your family better for less |
Tips for using the Insurance vs Investment Comparison Calculator
- Ask for the policy's IRR in writing – "guaranteed" maturity often means a low return.
- Surrendering an old policy early can lose money; compare paid-up value before deciding.