What Are Different Life Insurance Plans in India?
Updated On Apr 21, 2021
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When it comes to financial planning, an investor today has a range of choices to choose from. Most people tend to focus on the creation of wealth and compromise with the protection element. Before continuing to discuss all other aspects, insuring your life and the financial protection of your dependents should be paramount.
Different Types of Life Insurance Policies in India
Given below are the different types of life insurance policies that are available in India
1. Term Life Insurance
Term life insurance is a form of life insurance that provides the beneficiary with a death benefit only if, during a specified period, the insured dies. If the insured lives to the expiration of the policy term, the insurance plan ends without value and no claim may be made for benefit or death.
Also Read:- Top Term Insurance Plans In India
2. Whole Life Insurance
It is an insurance plan that guarantees a lifetime coverage as long as the policy is in effect. Whole life insurance plans often include a portion of cash value that increases over time. You can withdraw the cash value according to your preference or take loans against it. Furthermore, the death insurance paid to the heirs in the event of your tragic demise will be reduced to the extent of loan taken if you had not repaid the loan.
3. Endowment Policy
In this, the insurer pays the policy holder the sum assured on the maturity date of the policy if the insured is alive, or otherwise to the beneficiary where the policyholder dies. The nominee receives the assured sum plus the “participating benefits/ guaranteed additions”, if the policyholder dies during the policy term. For the number of years that the insured lives in the insurance period, the bonus or profit is paid.
You May Also Like To Read:- Best Endowment Plans in India 2021
4. Money Back Policy
It gives you a portion of the sum assured at regular intervals during the policy term. If you live beyond the insurance tenure term, at the end of the policy term, you will still receive the remaining amount of the corpus and the accumulated bonus. However, in the case of an unfortunate event before the full policy term has ended, the beneficiaries are eligible to receive the full value of the sum assured, irrespective of the number of instalments paid.
5. Unit Linked Plans
These plans offer you the “dual benefit” of investment and protection. In this, the policy's cash value varies as per the “underlying investment assets' current net asset value (NAV)”. The premium paid is used to buy investment asset units chosen by the policyholder.
6. Retirement, Savings, & Investment Plans
Retirement plans assure you regular income after retirement. Life insurance providers in India sell these policies and help you create a pension corpus. This corpus is accumulated at maturity to create a “regular income stream” referred to as a pension/annuity. Savings and investment plans are types of life insurance policies that give the assurance of a lump sum amount for you and for the future expenses of your family.
Also Read:- Benefits of Purchasing Retirement Plans
Life insurance is not just to meet the family's living expenses in the absence of a breadwinner. During big financial emergencies, it must be capable enough to bail out the family. Therefore, one of two best types of life insurance that will support your family in various stages of life must always be chosen.