These days life insurance plays a vital role in everybody’s life. Investing money on life insurance plan is a way to add security to you and your family in later years. Life insurance protects the family member even if the insured person no more exists on this earth. There are different types of life insurance plans available in the market, to meet the demands of people through various aspects of life. So, here in this post, we have discussed regarding the types of life insurance policies available in India. Thus through the information provided below and select the best suitable plan according to your budget.
Different types of life insurance policies available in India
Almost each of us has heard about the term Life Insurance and the importance of life insurance. Life insurance mainly provides financial security to the family of insured in case of his/her untimely demise or other miss happening covered in the contract.
Life insurance is the contract between the policyholder and the insurance company. The company promises to make payment of sum assured to the named beneficiaries insured in case of his/her death.
There are several types of life insurance policies across the globe, but we have here discussed the details of the types of life insurance policies available in India. Thus, people seek information regarding the types of life insurance in India, and then they are in the right place.
Term Insurance or Term Plan
Whole Life Policy
Unit Linked Insurance Plan
- Term Insurance or Term Plan is that type of life insurance plan that provides complete coverage for a specific period. In case of death of the insured person during the policy possession, the death benefits will be provided to the nominee. If the policyholder survives during the complete policy term, then no payment will be provided.
- Term Insurance is one of the most common and affordable from other types of life insurance policies in India. The premiums of term insurance are much cheaper than other life insurance policies.
Benefits of Term Insurance Plan
- In the case of the untimely death of the insured person, the family gets supported with an enormous amount of money.
- The amount of money of sum assured helps the family to replace the loss of the income caused due to the insured person.
- The money provided in the term insurance gets utilized to pay off the loan, monthly household expenses, child’s education, child’s marriage etc.
Whole Life Policy
In the case of whole life policy, permanent life insurance gets provided by the company to the insured person. The whole life policy offers the cash value and lifelong protection cover as long as the insured person pays the premium. Under the whole life policy, the beneficiaries get a death benefit after the death of the insured person.
Under the whole life policy, the policyholder has to pay the regular premiums until he/she expires, and upon the total amount, the corpus gets paid to the family. The whole life policy gets expire when any possibility arises as there is no pre-defined tenure.
- Endowment plan is another type of life insurance policy plan that is a combination of insurance and saving. An endowment plan is different from a term plan in terms of maturity benefits.
- In the Endowment plan periodically bonuses are provided that are paid either on maturity or to the nominee under the death claim. On death, the death benefits are payable to the nominee.
- The Endowment plans are also known as traditional life insurance. Although there is an investment component initially, the risk is lower than other investment products, and so are the returns.
- The profits are the result of investing the premiums in the market.
Unit Linked Plans
- Unit-linked plans are a combination of insurance and investment. The initial amount paid towards ULIP gets partly used as a risk cover and somewhat gets invested in funds. Depending upon the risk appetite, one can invest in different funds provided by the insurance company.
- An accumulated amount gets invested by the insurance company in the capital market, i.e. bonds, debts, hybrid funds or market funds.
- The value of the investment portfolio gets covered by the Net Asset Value.
- There are many similarities between ULIPs and mutual funds.
So, these all were the details of different types of life insurance policies available in India. We hope that the information provided above regarding the types of insurance policy was helpful for all of you. If there is any person who has not purchased the life insurance, then select the package according to the budget and get the life insurance to the earliest.
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