Life Insurance | There are 7 types of life insurance policy, option to get return with protection | Praphul Sandhu


Life Insurance | There are 7 types of life insurance policy, option to get return with protection | Praphul Sandhu

Life insurance is useful for you as well as your family. 

Life Insurance is useful for you as well as your family. If someone is the sole breadwinner of the family, then after his death, life insurance can provide some financial relief to the people dependent on him. Life insurance is not just one type. Some policies give you cover as well as the option to get returns through investments. You can choose from 7 types of life insurance policies depending on your need…

1. Term Insurance Plan

This plan are often purchased for a hard and fast period of your time , like 10, 20 or 30 years. Under this plan, you get coverage for a tenor ie tenure as chosen by you. There is no maturity benefit in such a life insurance policy. They provide life cover without the savings/profit component. Hence, they are cheaper as compared to other policies. In term insurance, on the death of the policyholder during the policy term, the Sum Assured under the policy is paid to the beneficiary.

2. Endowment Policy

This type of life insurance policy has both insurance and investment. This policy has a risk cover for a specified period and at the end of that term the sum assured along with the bonus is returned to the policyholder. The face value of the policy amount is paid under the endowment policy on the death of the policyholder or after the required number of years. Some policies also pay just in case of critical illness.

3. Moneyback Insurance Policy

This policy is a kind of endowment policy only. This policy also has a combination of investment and insurance. The difference is that in this life insurance policy the sum assured along with the bonus is returned in installments during the policy term itself. The last installment is available at the end of the policy. If the policyholder dies during the policy term then the whole Sum Assured gets to the beneficiary. However, the premium of this policy is the highest.

4. Lifelong Life Insurance

In Lifelong Life Insurance ie Whole Life Insurance Plan, you get protection for life. That is, the policy has no term. On the death of the policyholder, the nominee gets the claim of insurance. Other life insurance policies have a maximum age limit, which is usually 65-70 years. After that, the nominee cannot take the death claim in case of death. But under Life Life Insurance, the nominee can claim even if the policyholder has died at the age of 95 years. The premium of this policy is extremely high. Under this policy, the policyholder has the option to partially withdraw the sum assured. Apart from this, he can also take money in the form of loan against the policy.

5. Ulips

Both protection and investment remain during this plan also .The returns you get in traditional endowment insurance policies and moneyback policies are assured to an extent, whereas there is no guarantee of returns in ULIPs. The reason for this is that in ULIPs, the investment portion is invested in bonds and stocks and you get units like mutual funds. In this case, the returns are based on the volatility of the market. However, you'll decide what proportion of your money should be invested in stocks and the way much money should be invested fettered .

6. Retirement Plan

Life insurance cover is not available in this plan. It is a retirement solution plan. Under this, you'll build a old-age pension by assessing your risk. After a specified period, you or the beneficiary after you will be paid a certain amount as pension. This payment are often on monthly, half yearly or yearly basis.

7. Child Insurance Policy

These plans are designed keeping in sight the education expenses and other needs of the youngsters . In a child plan, a lump sum amount is paid after the death of the policyholder but the policy does not lapse. All future premiums are waived off and therefore the insurance firm continues to take a position on behalf of the policyholder. The child gets money for a particular period.

Source: policybazaar.com,