We always try to be prepared for unforeseen event by implementing some contingency plan. Our life is no exception to the uncertainties, hence we always care about our family, especially their financial security behind us. In the earlier times, purchasing a life insurance policy was just to gain life cover; but the cut-throat competition has urged insurance industry to offer more and more to the customers. This led into providing savings and investments provisions along with the life cover. Nowadays, you can also purchase the life insurance online. Considering the needs of savings, investments, child goals, and retirements, the insurance companies have introduced several plans fulfilling the needs of the customers. Following are the 7 types of life insurance plans that are generally offered by insurance companies in India. Whole Life Policies As the name suggests, whole life insurance policies are designed to provide the life cover throughout the life of the policyholder, considering the life expectancy till the age of 100 years. If the life insured outlives the tenure of 100 years, the survival or maturity benefits are paid as soon as he completes his 100 years. In case an event occurs before completing 100 years, the death benefits are paid to the beneficiaries. Term Insurance Policies Term insurance is the basic life insurance which aims to provide life cover to the life insured up to a certain period. These plans are pure life policies that do not provide any maturity or survival benefit of the life insured outlives the policy term. Hence, the premiums are very low when compared to other life insurance policies. Endowment Policies Endowment plans are nothing but a combination of savings and life cover. In these plans, a particular amount of your premiums is used for the life cover, and the rest is invested in the market. On the survival of the life insured, the insurer offers maturity benefit at the end of the policy tenure. These plans can be said as low risk investment tools that may offer bonuses periodically. ULIPs Unit Linked Insurance Plans are a blend of investments and insurance. Like Endowment plans, some part of the premiums is used for the life cover whereas the rest is invested in market funds. You can choose your fund and invest into it depending on your risk appetite, also you can switch between the funds when the policy is initiated. Money Back Policies In this type of the life insurance, a percentage of the desired sum assured is paid periodically to the life insured as a survival benefit. The insurer may declare bonuses depending on the performance of market. Retirement Policies Retirement plans or pension plans are designed in such a way that help you build enough corpus for your retirement. This helps you live financially independent even after your retirement. Child Plans Child plans are specifically designed to build the corpus for your child’s educational expenses and marriage. The benefits are paid out only when your child completes 18 years of his age. Though the name sound like insurance for the child, the life cover is offered to the parent which on his unfortunate demise, takes care of the child. These are the most common types of life insurance policies offered in India. Many insurance companies offer term life insurance online on their websites. Depending on your risk appetite, your current and future financial goals, and your lifestyle, you can opt for one that suits your needs best.
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February 2022
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