Types And Features Of Life Insurance Plan In India
Updated On Feb 06, 2024
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Life insurance plans come in different types according to every need. If you wish to secure your family with a life insurance plan then you must consider the types and features of life insurance plans listed below.
Types of Life Insurance Plans
There are several types of life insurance plans available and it is important to be aware of the different options. Here are a few of the most common types of life insurance plans:
1. Whole Life Insurance:
It is one type of plan that offers lifelong coverage. This means that as long as you continue to pay the premiums, the policy will remain in force. Whole life insurance also has a cash value component, which can be used as a loan or withdrawn in case of an emergency.
2. Term Life Insurance:
It is another popular option and it provides coverage for a set period, typically 10-30 years. These policies do not have cash value criteria. Term life insurance sounds more affordable than whole life insurance to the majority of policyholders.
3. Universal Life Insurance:
This type of life insurance offers more flexibility than whole life insurance. The death benefit will be paid out to your beneficiaries regardless of when you die.
4. Child Life Insurance:
It is a contract between the parent and the insurance company in which the parent pays premiums to keep the child covered until they reach adulthood. The child’s beneficiaries would receive a death benefit if the child were to pass away.
5. Endowment Insurance Plan:
It is a life insurance policy that pays out a lump sum of cash to the policyholder after a set number of years, or upon their death. The money can be used for any purpose, such as paying off debts or funding retirement.
6. ULIPs:
A ULIP plan is a life insurance plan that offers investors the dual benefits of life insurance and investment. It is a flexible plan that allows the policyholder to change the premium amount and investment options as per their needs.
Features of Life Insurance Plans You Must Know
When you are looking for a life insurance policy, there are certain features you should be aware of. Here are some key features of life insurance plans that you must know:
- Death Benefits: The death benefit is the most important feature of a life insurance policy. It is important to make sure that the death benefit is sufficient to cover your final expenses and provide for your loved ones.
- Premiums: Another important feature of a life insurance policy is the premium. This is the amount of money you will pay for your coverage. Premiums can vary depending on factors such as your age, health, and lifestyle. It is important to compare premiums from different insurers before selecting a policy.
- Coverage Duration: Another thing to consider when selecting a life insurance policy is the coverage period.
- Life Insurance Can Help You Save for Retirement: If you have a cash value life insurance policy, a portion of your premiums will go into a savings account that can be used to help fund your retirement.
- Life Insurance Can Be Used As Collateral for Loans: If you need to borrow money, you can use your life insurance policy as collateral for the loan. This can be especially helpful if you have trouble qualifying for a loan based on your credit history.
Conclusion
Most people know that life insurance provides financial protection to loved ones in the event of their death. But there are other features of life insurance plans that you may not be aware of. Consider the features and types of life insurance policies mentioned above to get the best plan.
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