There are various types of life insurance which protects against financial loss between an insurance policyholder and an insurer. The insurer promise to pay a designated beneficiary a sum of money in exchange for a premium, upon the death of an insured person or the beneficiary.

Life insurance is a form of the insurance in which a person makes regular payments to an insurance company and in return get death benefit to the beneficiary family.

There are basically two types of life insurance policies

  1. Traditional Whole Life
  2. Term Life Insurance

The whole life policy is a policy in which you pay until the death of the policyholder while term life is a policy for a fixed amount of time.

Life insurance types

Endowment Policy 

  • An endowment policy is a policy that covered the insured for a particular period of time.
  • Therefore, the insured has the option to insure himself until the time he wants to be insured.
  • Upon the death of the insured, the beneficiary family receives the sum assured plus the bonus amount.
  • The bonus is that amount which is paid for the number of years the policy was in force.
  • Upon Maturity, the insured receives the sum assured as well as the bonus amount for the term of the policy.
  • In case of survival, the life insurance policy term the beneficiary receives the sum assured plus a bonus of the term of the policy.

Term Insurance 

  • The term insurance plan offers coverage only for a set period of time of the life insured of an individual.
  • For any death or permanent disability during the period of the plan, the beneficiaries or his family will be paid benefits to cover income loss or unpaid debt.
  • Disability can be partial as well as total, depending on the type of plan. Therefore, the insured survives the term of the plan, no such benefits are paid.

Whole life insurance 

  • It is the life insurance plans that do not expire.
  • Many of the permanent life insurance policies come with a feature known as “cash value” or “cash surrender value.”
  • The main advantage of permanent life insurance is the policy accumulates a cash value against which you can seek loans.
  • Loans are to be paid back with interest or the insured person or her family might receive a reduced death benefit.

Annuity Plan

  • An annuity is a contract between two parties, one being the insurance company and the other being the insuree.
  • It is a series of equal payments that are made at regular intervals of time.
  • For example, if somebody invests INR 10000 per month for 30 years of his working life, his investment fund would be 36lacs plus interest.
  • In this portfolio, he can buy an annuity for the rest of his life as a pension.
  • These payments can be made monthly, quarterly, half-yearly, and annually.
  • It is a popular choice among people who want a steady income after their retirement.

Unit link Insurance Policy

  • A unit-linked insurance plan is a market-linked product that aggregates the very best of life insurance.
  • Unit Linked Insurance Plan is a plan linked to the capital market and the debt offers flexibility to invest in equity or debt funds as per the risk is taken by an insured person.
  • That dual benefit is done up the flexibility of a unit-linked insurance plan that turns them in terms of attracting investment.
  • The IRDA capped the annual charges for the first 10 years at 2.25 percent. At present, many of the ULIPs launched in recent years are much cheaper than mutual funds.

Money-Back life insurance

  • Money-back life insurance is one of the more popular life insurance plans in India which guarantees a return on their investment in addition to their insurance coverage.
  • It is that policy that protects you and your family financial interest from uncertainty such as
    • Death or
    • The critical illness of the policyholder.
  • The periodic payments create wealth for meeting financial commitments at the initial stages of life.

There are many aids for marketing but no one will make you buy life insurance, individual liability, or any long-term care insurance of the person. The environment of the life insurance market changes from time to time and the customer expectations are increased with new technology services at quick.

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