Types of Life Insurance: Unfortunate does not happen by telling. In such a situation, it is natural to worry about the future of your family and the people who depend on yourself. Life insurance is helpful in removing this concern to some extent. If someone is the sole breadwinner of the family, then after his death, life insurance provides some financial relief to the people dependent on him. Life insurance is not of the same type. Some policies offer cover as well as the option to earn returns through savings and investments. There are 8 types of life insurance policies available in India. Let us know about them-
1. Term Insurance Plan
This plan can be purchased for a certain period of time, such as 10, 20 or 30 years. this plan provides coverage for the chosen period. such a life insurance policy does not have maturity benefit. that is, they provide life cover without savings/profit component. so term plans are cheaper than other policies. in term insurance, in case of death of the policy holder during the policy term, an assured sum i.e. a fixed amount is given to the beneficiary under the policy.
2. Endowment Policy
such a life insurance policy has both insurance and investment. The risk is covered for a certain period and at the end of that period, the assured sum along with the bonus is returned to the policyholder. The face value of the policy amount is paid under the endowment policy after the death of the policyholder or the stipulated years. some policies also pay in case of serious illness.
3. Moneyback Insurance Policy
This life insurance policy is a type of endowment policy. It is also a combination of investment and insurance. The difference is that in a moneyback policy, the sum assured along with the bonus is returned in installments during the policy term itself. The last installment is available at the end of the policy. If the policyholder dies during the policy term, the entire Sum Assured is paid to the beneficiary. But keep in mind that this policy has the highest premium.
4. Ulip Plan
The ulip plan also has both protection and investment. the return in the traditional i.e. endowment insurance policy and moneyback policy is certain to an extent, while there is no guarantee of return with ulips. The reason is, the invested part in ulips is invested in bonds and shares and like a mutual fund you get a unit. In such a situation, the return is based on the fluctuations of the market. however, you can decide how much of your money goes into the stock and how much money goes into the bond.
5. Savings & Investment Plans
Such life insurance policies not only provide the best savings tools for short-term and long-term financial goals, as well as assure your family of a certain amount of money in the form of insurance cover. This type of life insurance policy category covers both traditional plans and ULIP linked plans.
6. Lifelong Life Insurance
In Lifelong Life Insurance ie Whole Life Insurance Plan, the policyholder gets protection for life. This means that the policy does not have a fixed term. On the death of the policyholder, the nominee gets the claim of insurance. Other life insurance policies have a maximum age limit, which is usually 65-70 years. After that, the nominee cannot take the death claim in case of death. But the specialty of lifelong life insurance policy is that even if the policyholder has died at the age of 95 years, the nominee can claim. Under this policy, the policyholder has the option of partially withdrawing the sum insured and can also take money as loan against the policy.
7. Child Insurance Policy
These plans have been made keeping in view the education expenses and other needs of the children. In child insurance, a lump sum amount is given after the death of the policyholder but the policy does not terminate. All future premiums are waived off and the insurance company continues to invest on behalf of the policyholder. The child gets money for a certain period.
8. Retirement Plan
Retirement plan is a retirement solution plan, it does not have a life insurance cover. Under the retirement plan, you can assess your risk and create a retirement fund. a certain amount will be paid as pension to you or after you after a fixed period of time to the beneficiary. this payment can be on a monthly, half-yearly or yearly basis.