Life insurancepolicy is the most basic kind of investment that every individual does. What started as a basic term insurance plan with only death benefit now offers many products under its realm to meet demands of people from different walks of life. The variety that you can now avail under the life insurance category proves sufficient to meet with your financial goals. Following are the different types of life insurance policies you can opt for –
Term Insurance –
This is the most basic and simplest form of life insurance policy. Also, the premium rate for this is very low. This plan offers only death benefit i.e. in case the insured dies the entire sum assured is handed to the nominee of the policy. There are no added bonuses or any maturity benefit in the plan. This plan can be availed for a period ranging from 10 years to 30 years. So if you out live the policy period you are not liable for any benefits. This policy is mostly availed to ensure your loved ones are safe in case you are victim of an eventuality.
Endowment Plan –
This proves to be one of the best savings plan under life insurance policies. The plan offers a particular sum assured at the end of a specific tenure. This plan offers maturity and death benefit, which means that not only can you be sure of the financial security of your loved ones but also make the most of the investment if you out live the policy tenure. On the maturity of the plan the insured receives the sum assured plus some bonuses on the investment. Usually this plan will mature after 10, 15 and 20 years or up to certain age limit.
Unit Linked Insurance Plans are a popular life insurance policy today as they offer the benefit of life insurance as well as mutual funds. Under this plan a certain amount of the premium you pay is invested in equities or debt funds and the remaining amount is used for life coverage. Tip – if you are planning to invest in this plan then you should be ready for the risks related to stock market.
Pension Plans –
More popularly known as retirement plans, this lifeinsurancepolicy ensures you have a happy life after retirement. Under this plan the insured is required to pay premium for a particular period of time. At the end of the policy tenure the provider offers a particular sum to the insured either on monthly basis or yearly basis.
Different types of life insurance policies in India