What Is Life Insurance – Types of Life Insurance A life insurance policy is a contract between an individual and an insurance provider, in which the insurance company provides financial protection to the policyholder in lieu of a monthly fee called premium.
Based on this arrangement, on the death of the policyholder or, if the policy matures, after some time, the insurance provider pays a lump sum amount to that person or his family. There are different types of life insurance policies in the market to suit the individual demands and needs of the policy buyer. And in today’s post, we will tell you what is life insurance, what is term life insurance, types of life insurance, benefits of life insurance, so first of all we know what is life insurance.
Contents
What Is Life Insurance
Life insurance plans help meet the various financial objectives of an individual and his family. Some of the goals of an individual that life insurance policies help in fulfilling are-
- Financial protection in case of death
- education for kids
- marriage of children
- buying/owning a house
- Pension or regular income after retirement
With the help of a life insurance plan, you can achieve certain financial goals. Life insurance plans are quite versatile. You can plan for the life goals you have set and incorporate your insurance into it to help you achieve them.
You can use the corpus generated from an endowment plan traditional or market linked to pay for a house in the future.
Types of Life Insurance
If someone is the sole breadwinner of the family, then after his departure, life insurance gives some financial relief to the people dependent on him, but it is not just one type, with some policy cover for savings and investments. It also gives the option of getting returns through this.
That is, it is also useful for the insurer himself, there are a total of 8 types of life insurance policies available in our India, the insurer can choose the policy for himself according to his need, so let’s know the Types of Life Insurance policy
1. Term insurance plan
2. Retirement Plans
3. Savings and Investment Plans
4. ULIP Plan
5. Endowment plans
6. Child Insurance Plans
7. Moneyback Insurance policy
8. Whole life insurance
Term insurance plan
what is term life insurance This plan can be purchased for a fixed time period like 10, 20 or 30 years. This plan provides coverage for the period chosen by you, such a life insurance policy does not have maturity benefit.
That is, they provide life cover without a savings component, hence term plans are cheaper than other policies, in term insurance, on the death of the policy holder during the policy term, the sum assured under the policy is paid to the beneficiary. Is.
Retirement Plans
what is Retirement life insurance, Retirement life insurance plan helps in building a stable financial source for a person’s retirement years, it helps a person to become financially independent and live without any worries.
Most retirement life insurance plans offer an annual payout on completion of 60 years or a one-time lump sum payout (by way of commutation/conversion of accumulated amount up to the prescribed limit). The insurer pays the insurance benefit to your family in case of a possible event during the policy term.
Savings and Investment Plans
what is Savings and Investment insurance With the help of a life insurance plan, you can achieve certain financial goals. Life insurance plans are quite versatile, you can plan for your defined life goals and incorporate your insurance into it to help you achieve them.
You can use the corpus generated from an endowment plan traditional or market linked to pay for a house in the future.
Such life insurance policies not only provide great savings tools for short term and long term financial goals, but also assure your family of a certain amount in the form of insurance cover. This type of life insurance policy category covers both traditional plans and ULIP linked plans.
ULIP Plan
what is ULIP plan, ULIP plan also have both protection and investment, the returns from traditional endowment insurance policies and moneyback policies are assured to an extent, whereas with ULIPs, there is no guarantee of returns.
Because, in ULIPs, part of the investment is invested in bonds and stocks and you get units like in mutual funds, so the returns are based on the volatility of the market, however you can decide how much of your money is in the stock. and how much money was invested in bonds.
Endowment Plans
what is endowment plan Endowment plan is a traditional life insurance policy which is a combination of insurance and savings, in an endowment plan, if the life assured i.e. the insured person lives beyond the policy period, then the insurance company provides maturity benefit to the policyholder,
Also some endowment plans may offer periodic bonus which is paid either on maturity or in case of premature death of the policyholder.
Child Insurance Plans
what is Child Insurance Plans The goal of a child life insurance plan is to build an corpus for the future development of the child, usually it helps to provide money for a child’s education and marriage, such a plan is one of the major milestones in a child’s life. Provides installments yearly after or pays lump sum amount.
If the insured parent dies during the policy term, all future premiums are waived off and policy benefits continue to accrue without any interruption.
Moneyback Insurance policy
what is Moneyback Insurance policy This life insurance policy is a kind of endowment policy, it is also a combination of investment and insurance, the only difference is that in moneyback policy, the sum assured along with bonus is returned in installments during the policy term itself.
The last installment is payable at the end of the policy, if the policyholder dies during the policy term then the entire Sum Assured gets to the beneficiary, but keep in mind that this policy has the highest premium.
Whole life insurance
what is Whole life insurance Whole life insurance plans cover the life assured (insured) for the whole life, or in some cases till the age of 100 years.
At the time of buying a whole life insurance plan, the sum assured is determined, a nominee is mentioned at the time of purchase, death claim and bonus, if applicable, is paid in case of any unfortunate event. Is.
However, if the life assured survives more than 100 years, the insurance provider pays the life insured a maturity benefit equal to the endowment corpus.
Benefits Of Life Insurance
There is a common belief of people about life insurance that it gives benefits after life, people even think whether they stay or not, but at least the family will be benefited, this notion is totally wrong because life insurance It can give you all the facilities and benefits in your life, which you would never have thought of.
For this, you will need to know before taking life insurance, what are the facilities available in it, people often want to know about the premium and see that what the nominee will get after death, people do not care. Know what is the survival benefit in it.
That is, what facilities will be available during life, so today we know about those 6 benefits of life insurance which can bring many big changes in your life.
1. Personal Pension Plan
2. Source of earning when needed
3. Reduce premium by taking a rider
4. Help Save Tax
5. Benefit of Maturity
6. Use as Security
Conclusion
Friends, in today’s post you learned about what is life insurance, what is term life insurance, types of life insurance, benefits of life insurance and I hope that you must have liked this post of ours, so if you liked this article of ours, then definitely share this post with your friends, thank you.
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