Life insurance is a protection against financial loss between an insurance policy holder & an insurer or assurer, in which 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 insurance of a person in which a person makes regular payments to an insurance company & in return get death benefit to the beneficiary family. There are basically two type life insurance policies which are:
- Traditional Whole Life
- 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.
Types of life insurance Policy
Endowment Policy is a policy which 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. A 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 of the up to the life insurance policy term the beneficiary receives sum assured plus bonus of the term of the policy.
Term insurance plan offers coverage only for a set period of time of the life insured of the individual. 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 both 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
If anyone loves his/her family more than oneself, then he should opt for this protection tool life insurance. It shall take care of you as well as your family’s needs especially the financial ones. These are 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.” This feature, not a part of most term policies, provides you with some options. The main advantage of a permanent life insurance is the policy accumulates a cash value against which you can seek loans. When you go for loan application then you have to keep one thing in mind that Loans are to be paid back with interest or insured person or her family might receive a reduced death benefit.
An annuity is a contract between two parties, one being the insurance company and the other being the buyer or the insured person. It is a series of equal payments that is made at regular intervals of time. For example, if somebody invests Rs. 10000 per month for 30 years of his working life, his investment fund would be 10000*12*30= 36lacs plus interest. On this portfolio, he can buy annuity for rest of his life as the pension .These payments can be made monthly, quarterly, half – yearly & 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 the market-linked product that aggregates very best of the life insurance. Unit Linked Insurance Plan is a plan which linked to the capital market & 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 unit linked insurance plan turns them in terms of attracting investment. The IRDA capped the annual charges for first 10 years at 2.25 percent but 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 guaranteed return on their investment in addition to their insurance coverage. It is that policy that protects you & 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 initial stages of life.
There are many aids of 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 are changes from time to time & the customer expectations are increased with new technology services at quick.