Types of Life Insurance

  • Term life insurance :
  • It is the most basic and purest type of life insurance.
  • As the name suggest(Term), it covers for specific period of time. ( For ex. 30 years, 40 years or 50 years)
  • Term plans offers Higher Sum Assured  benefit with low premium.
  • If policyholder dies within term and policy is in inforce(active) status , Death benefit is given to Beneficiary.
  • Policyholder does not receives any benefit if he survives throughout the policy term. It means insured does not receives any maturity benefit.
  • No Surrender benefit is given in this type of plans.
  • Policyholder cannot opt for loan in this type of plans.
  • There are various subtypes of Term Plan like Level term plan, Decreasing term plan , Increasing term plan and term plan with return of premium.
  • Whole life insurance :
  • It is a kind of permanent life insurance.
  • It is similar to term plan where term plan is for limited period ,this plan does not have any limit. It means, it is applicable for whole life , upto 100 or 99 years as per plan.
  • Sum assured or Coverage is given to beneficiary in case of unfortunate demise of policyholder provided the policy should be in inforce(active) status, whereas  maturity benefit is given on rare occasion when insured survive for 100 years.
  • Premiums are costly as compared to term plan.
  • Cash value or surrender value is acquired in this type of plan.
  • Policyholder can opt for loans against surrender value that has been acquired.
  • Endowment life insurance  :
  •   Endowment plans provides both saving and protection to insured.
  •   This type of plan provides Benefit in both the condition, both Death and Maturity. Death benefit is given to Nominee of policy whereas Maturity benefit is given to Policyholder.
  • Sum assured plus bonus or Guaranteed addition if any is given to policyholder in  case of death or maturity.
  • Risk is lower in such plans so as returns.
  • This plan is also called as Traditional life insurance plans .
  • Cash value or surrender value is acquired in this type of plan. premium must be paid for minimum 3 years . ( It may vary according to different plans)
  • Policyholder can opt for loans against surrender value that has been acquired.
  •  Moneyback life insurance :
  • As the term suggest , in such plans policyholder is awarded with percentage of sum assured  on regular intervals during policy term provided the policy should be in inforce status.
  • Policyholder receives Sum Assured  benefit  on unfortunate demise or Maturity.
  • Policyholder is availed with bonus in such type of plan.
  • Cash value or surrender value is acquired in this type of plan. premium must be paid     for minimum 3 years . ( It may vary according to different plans).
  • Policyholder can opt for loans against surrender value that has been acquired.
  • It is one of best plan for meeting short term goals.
  • Child Plan
  • This type of plans helps to create funds during key occasions of Child life like marriage, abroad studies , buying a property, etc.
  • This  plans mostly provide annual installment or one time payout post attainment of 18 years of age.
  • In case if Contract owner(parent) dies within policy term , Lumpsum amount according to various plan is given to child or family.
  • Post Death of contract owner(parent) within policy term, insurance company may waive of premium .( differ from plans to plans)
  • Retirement Plan :
  • This type of plan is also called as pension plan.
  • It helps to secure financially post retirement. Policyholder gets regular income and he is not dependent on anyone for liabilities.
  • There are different types of pension plans like Immediate annuity and deferred annuity.
  • When Policyholder  opts for immediate annuity, benefits start immediately, while in case of Deferred it start after some years.
  • There are different types of pension plans like Immediate annuity and deferred annuity.
  • When Policyholder  opts for immediate annuity, benefits start immediately, while in case of Deferred it start after some years .
  • Annuity can be given monthly, half yearly, quarterly or annually . Policyholder has to choose based on his requirements.
  • One of the best plans to live stress free life post retirement.
  • Unit Linked Insurance plan :
  • Unit linked plan is a mixture of insurance and investment.
  • In Ulip plans, Part of policyholder premium goes to Fund(Equity, debt,balance,etc) and another part goes for risk coverage.
  • This type of plans have locking period of 5 years.
  • Partial Withdrawal can be opted post Locking period.
  • Sum assured or Fund value  whichever is higher is given to policyholder on Death as vale as maturity.( benefit may vary according to plans).
  • Cash value or surrender value is acquired in this type of plan.
  • Policyholder can opt for loans against surrender value that has been acquired.

Disclaimer :

This article is not sponsored and not meant for endorsing any particular insurance company. Please Check Terms and Condition of respective organization along with inclusion and exclusion before buying insurance policy.

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