Types of Life Insurance Plans Introduction Life Insurance

Types of Life Insurance Plans

Introduction • Life Insurance is one of the fastest growing insurance product in India. • Right from offering the benefit of investment as well as insurance, having a life insurance policy ensures your and your family’s financial safety. • There are many types of life insurance products available in India. • Here are various types of life insurance policies that you can buy:

Term Insurance • A term insurance plan is a pure protection plan that offers financial coverage to a policyholder only for a specific period of time. • This is the most affordable form of life insurance as it offers high coverage at a low premium. • Under this type of life insurance plan, a sum assured is paid to the nominee if the policyholder dies during the term of the policy

Endowment Policy • Unlike term insurance plan, an endowment policy pays out the policyholder under both the scenarios i. e. death and survival. • This type of life insurance offers both the benefit of savings and insurance. • A part of the premium is allocated towards the life cover while the other part is invested. • The policyholder is eligible to receive the life cover and accumulated bonuses if any on maturity or after a specific period of time or death of the insured.

Money back Policy • A money back policy provides periodic payments to the policyholder. • A survival benefit is paid to the policyholder if he is alive. • In case of death during the policy term, the nominee receives the full sum assured along with bonuses ifany.

Whole Life Insurance • This type of life insurance provides coverage to the policyholder for as long as he survives. • This policy is provided for securing an individual till 100 years or for whole life. • Under this type of insurance, the policyholder is required to pay premiums until his death or for a specified period of time. • The nominee or the beneficiary is paid the sum assured along with the bonus on death of the insured. • On Survival till the end of the policy term, the policyholder receives the maturity benefit along with accumulated bonuses.

Unit Linked Insurance Plan • A ULIP Plan offers the policyholder the benefit of both investment and life insurance. • A certain percentage of premium is used for life cover while balance amount is invested.

Pension Plans • Also known as retirement plan, a pension plan is an investment plan that provides you with a steady income flow post your retirement. • It helps you save a part of your income to build a healthy financial future.

Pension Plans • A child plan is an insurance plan that helps you build a financially secured future for your child. • It helps you build a financial corpus to fund your child’s education or marriage. • It also protects your child in case of your unfortunate demise. • Recommended Read: Different Types of Life Insurance Policies