Tuesday, July 23, 2019

What Are the Different Life Insurance Plans Available in India?


Life Insurance provides financial security to the family in case of death of the insured. Most of them have become aware of the importance of Life Insurance. There are lots are people who are not aware of different types of Life Insurance available in India.

Mainly there are two categorizations of Life Insurance Plan. They are the Term Life Policy Plan and the other is the Traditional Whole Life Policy Plan. Whole Life Policy is usually till 100 years of age or till the insured stays alive, so thecompany will have toprovide the maturity benefit, else death benefit if dies during tenure.

Apart from this, there are many classifications of plans which are as detailed below:

1)      Term Insurance:

This is a death risk cover plan which offers a higher sum assured with fewer premiums in case of death of the insured. But if one outlives the policy term, then nothing will be provided to the insured.

2)      Whole Life Policy:

This policy covers the whole life, which is usually up to 100 years. After completion of the premium payment term, a certain sum assured is given to the insured.The premiums are comparatively higher than term plan.

3)      Endowment Plan:

If insured outlives the tenure, then maturity benefits will be provided along with the bonus. But if insured dies during the policy period, a sum assured is given to the family member.

4)      Unit Linked Insurance Plan or ULIP plan:

This is purely a market-linked plan. Here the company invests in the equity market. Thus the maturity amount received is solely based on market performance. They have surrender values, loan values and paid-up values.

5)      Money Back Policy:

This plan is similar to the endowment plan except that it offers a portion of the sum assured at regular intervals. If insured dies during the life insurance policy term, the entire amount of sum assured is given to them.  If they survive the policy term, they receive the balance sum assured.  Anyone in need of periodic payment should opt for this policy. The tenure for Money Back Policy is long usually up to 20, 25 or 30 years.

6)      Child Plan:

Child plan or children plans are investment and insurance plan which finances for children’s future taking into considerations essential parts of their lives like a child’s education, marriage, etc. It is beneficial to the child if the parents reach a certain age. In a few of the children's plan, the amount is waived off in case of a parent's death, but still, the policy continues. Also, most of the policy offers one-time payout or annual installments once the child turns 18.

7)      Annuity Plan or Retirement Plan or Pension Plan:

An annuity plan is a long term plan. In this plan, a certain contribution is required as a single premium or regular payment which can be used as a periodic payment after the retirement. The premium amount payable should be large as it could provide higher income in the future. Taking into consideration all the expenses and loans like home loan, car loan, etc. the premium amount should be decided to get the required premium amount.

It is essential to choose a Life Insurance plan by doing a thorough investigation to avoid any doubts during receiving of maturity amount or sum assured. This one decision of purchasing the right planwill decide our family’s future and thus ensure that they stay safe and enjoy financial freedom.

Author: verified_user