Types of Life Insurance Policies:
In India, term insurance is becoming popular rapidly and around 24 life insurance companies in India are providing different types of life insurance plans with several benefits and riders. These insurance policies are designed to give financial security for the dependents of a person in case of his death.
Some Term insurance plans
have inbuilt investment plans or wealth creation along with insurance protection. These products are considered as specific tailor-made products for various life stages such as child plans, retirement plans or pension plans etc. In fact, some insurance also gives loan facility along with insurance feature. According to the Indian Income Tax Act, all life insurance premiums provide tax benefits to the policyholder.
Under this plan, some part of the sum assured in returned back to the policyholder in case of survival of the insured person. The nominee receives the death benefit in case of policyholder’s death during the policy term and this death benefit is equal to the sum assured plus accumulated cash benefits.
It gives financial security for the whole family of the policyholder in case of his or her sudden death. This plan provides high sum assured at low cost and cover is available for a period of time. Generally, it will be available for 5, 10, 15, 20 or 30 years.
- Whole Life Insurance Policy
The policy gives protection against risks for throughout life of the insured person and the policy continues as long as the insured is alive. It gives death benefit to the nominee in case of insured’s death. This insurance does not include any survival benefits.
- Endowment Insurance Policy
It is a savings-linked insurance which offers cover for a certain time period and the insured person get sum assured with a bonus at the time of maturity in case of his survival.
- Unit-Linked Insurance Policy
This plan is a combination of both investment and life insurance. Some portion or percent of the premiums goes into investment and some part goes into investment.