How to Know if your Kotak Life ULIP Policy is Doing Better by Looking at NAV?

    A huge motivation to work hard in life is accumulating wealth to secure your future. When you invest in Kotak e-Invest Plan, you can maximise your wealth and build a substantial asset portfolio. ULIP is a unique financial asset that helps with savings and investments. ULIPs come with an NAV which is crucial for them.

    Fundamental Knowledge About ULIP

    ULIPs are financial instruments that integrate investments with life insurance. Therefore, protective coverage and wealth maximisation come from a single package. The profits generated from these investment options are known as ULIP fund performance.

    They are usually meant for achieving long-term goals. A portion of the funds paid for ULIP premiums is also utilised for life insurance. The remaining portion gets invested in various investment instruments like equity and debt funds. You are allowed to establish your investment mix based on risk tolerance and a prediction of returns.

    What Is ULIP NAV?

    The Net Asset Value of ULIP reveals the value of the assets in your funds by deducting the liabilities. ULIP NAV is often considered the book value. You will have to understand how unit funds function to grasp the NAV efficiently.

    ULIP investments involve pooling assets from multiple investors to create a huge sum of money. The pooled amount gradually gets invested in various market instruments. The entire investment gets split into several tiny units.

    The fund manager assigns each unit a specific face value. The face value is assigned for authorisation purposes. It enables the firm to distribute the ULIP fund profits to investors.

    How Is NAV Calculated?

    The value of every unit undergoes regular evaluation, and the expenses are also minimised. After that, the total units get divided by the amount. The value obtained after this procedure is categorised as the ULIP NAV.

    The NAV in ULIP can be attributed to the market value of all units. It helps investors analyse the growth of their funds. When the NAV percentage increase is calculated, investors are able to determine the original increase in their investment value.

    NAV is known to offer authentic information about a ULIP fund’s performance. The formula for calculating the NAV of a ULIP is as follows:

    {(Market value of fund’s investment + worth of current assets) – (Value of current liabilities)} / Number of existing units on the date of valuation

    More About ULIP NAV

    A high NAV does not always indicate expensiveness. But a high NAV also does not mean incorrect representation. It implies the fair value of assets after the chosen ULIP liquidates its holdings on a particular day. You should know that the NAV does not influence the mutual fund’s bearing, irrespective of whether it’s high or low.

    Key Takeaway

    After the necessary deductions, the NAV for each form of application, like maturity claim and surrender, is calculated similarly. ULIP has huge benefits, and NAV enhances its appeal in front of investors. So, before you invest in Kotak e-Invest Plan, make sure you consider all these aspects clearly.

    Click here to know more about Kotak Life ULIP Plan: