Different kinds of Life Insurance Policies in India
Life insurance is not a new term to any of us. We are quite aware of the life insurance policies, on how these help in safeguarding our family and us. These policies are insurance contracts that the policyholders make with the insurer to get financial support during an emergency. There are several reasons as to why having such policies are essential, but first, you need to understand what life insurance is.
What exactly is “Life Insurance”?
Life insurance is like an agreement between the insurer and insurance holder to financially cover the expenses of the policyholder’s family during an emergency. Many people understand the importance of having life insurance as they understand the need for financial support at the time of difficulties in life. On the flip side, several people still aren’t convinced with having such policies as they don’t understand its importance, and thus, they remain uninsured.
Buying a Family Life Insurance Plan
If you are looking for a life insurance plan for your family, then here are a few options you can choose from:
Term insurance plan
It is one of the simplest forms of life insurance policy that is easy to understand and affordable to buy. The term insurance offers high life cover at low premiums. Also, there are options to add insurance riders to increase the extent of coverage. If in case the insurance holder passes away during the policy period, the insurer gives death benefits to the nominee. In other words, we can say that a term insurance plan is a risk cover plan that comes with a host of benefits like different payout options, riders, tax benefits and more.
- Whole Life Insurance
A whole life insurance policy provides a lifetime cover to the insurance holder. These policies are not like the usual term policies that are valid until a certain period of time. In these insurance plans, the cash value component on the plan increases with time. The sum assured in the coverage is decided when the person buys the policy. This sum gets paid to the nominees at the time of the death claim of the policyholder. In several whole life insurances, there are bonuses as well, which can be collected during the claim. If the person who has bought the insurance outlives the age of 100 years, the insurer then pays an endowment cover to the person who insured his/her life. In a whole life insurance plan, the premiums are higher as compared to that of a term plan. Once the premium payment term gets completed, the insurance holder can raise a request for partial withdrawals as well.
- Endowment Plan
Endowment plan is another type of life insurance that is preferred by a lot of people. As in this plan, owing to the discipline-saving mechanism, a significant amount is provided to the insurance holder after the insurance gets matured. The endowment plan ranges between 5 to 30 years and has the double advantage of maturity as well as death benefits. In this insurance type, the person who purchases the plan can choose between paying a single premium or paying it at regular intervals. If you compare the premiums paid in an endowment plan and term insurance plan, you will see that the premiums are higher in endowment plans.
- Retirement Plan
The retirement plan is another important life insurance plan that helps the insurance holder in building a corpus for his retirement. This plan helps the policyholder to live worry-free as this plan gives financial help in the latter part of one’s life. The payout of this plan starts once the policyholder crosses the age of 60 years. In an unfortunate situation, when the insurance holder passes away during the policy term, the insurer has to pay the amount to the beneficiary immediately. Such retirement plans are also seen as a long-term investment that people prefer to safeguard their life’s later years.
- Money-Back Plan
In a money-back plan, you get to enjoy a fixed amount which is decided at the time of purchase. This money is given to the insurance holder as a survival benefit based on a certain milestone. And if in case the insurance holder meets with an unfortunate event, the nominee gets the death benefits. If you survive the policy term, then the insurer will extend the survival benefits as well as the bonus that is attached to the plan. It is a type of life insurance that is popular among many life insurance buyers.
These are a few significant life insurance policies that people opt for their safety. You can check all the details about them online and see which one amongst them suits you the most. Once you are satisfied with the premium, coverage and duration of a particular policy, you can purchase that life insurance to secure your future; at least financially.