Different Types of Life Insurance

September 9, 2009

Insurance, Life Insurance

In this article I will be writing about the different types of Life Insurance Plans in the market. As we know that Life Insurance is important for everyone to protect their family incase of their demise the insured money will save their family for educating their children and marriage of daughter, etc. According to your needs, one can choose their Life Insurance Scheme. This article presents the very basic knowledge on different Life Insurance plans and how it will benefit you in the future. If you have any doubts, please post it in the comments section. You can subscribe to our future articles here.life_insurance_policy

Term Insurance Policy

This policy is pure risk cover with the insured amount will be paid only if the policy hold dies in the period of policy time. The intention of this policy is to protect the policy holder’s family incase of death. For example, a person who takes term policy of Rs.500000 for 20 years, if he dies before 20 years then his family will get the insured amount. If he survive after 20 years then he will not get any amount from the insurance company. It is the reason why term policies are very low cost. So, this type of policy is not suitable for savings or investment.

Whole Life Policy

As the name itself says, the policy holder has to pay the premium for whole life till his death. This policy doesn’t address any other needs of the policy holder. because of these reasons this kind of policy is not very popular or insurance company not suggesting to take this policy.

Endowment Policy

It is the most popular Life Insurance Plans amoung other types of policies. This polciy combines risk cover with the savings and investment. If the policy holder dies during the policy time, he will get the assured amount. Even if he survives he will receive the assured amount. The advantage of this policy is if the policy holder survives after the completion of policy trnure, he receives assured amount plus additional benefits like Bonus,etc. from the insurance company. In this kind of policy, policy holder receices huge amout while completing the tenure.

In addition to the basic policy, insurers offer various benefits such as double endowment and marriage/ education endowment plans. The cost of such a policy is slightly higher but worth its value.

Money Back Policy

Money Back Policy is to provide money on the occasions when the policy holder needs for his personal life. The occassions may be marriage, education,etc. Money will be paid back to the policy holder with the specified duration. If the polciy holder dies before the policy term, the sum assured will be given to his family. A portion of the sum assured is payable at regular intervals. On survival the remainder of the sum assured is payable.

Summary

This article explained the very basic knowledge on different types of Life Insurance Plans. There is some other policy also available in the market but I did not write about it because these are the popular policies. If you have any doubts please post it in the comments section. Thank you for reading this article.

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10 Responses to “Different Types of Life Insurance”

  1. asif Says:

    your site a huge work in time

    Reply

  2. krishnas Says:

    Hello Asif,

    Thank you for the comments.

    Thanks,
    Krishna

    Reply

  3. Jonathan Paul Says:

    Thanks for this post. It helped me learn so many new things about life insurance. Lets us share our knowledge about life insurance and how to get the best quote possible for a life insurance policy as per individual requirements. Looking for such more discussions.
    http://www.onlyinsurance.com/

    Reply

  4. Peenuts Says:

    Nice article. Keep up the good work.

    Reply

  5. prasad naspoori Says:

    Please help me some body i want make a fixed depasit on the name of my doughter (1 Year old) with the LIC. just i want know is there any different polacy’s on term deposits

    Reply

  6. Life Insurance Says:

    Will I have to pay tax on endowment policy when its matured?

    Reply

  7. janardhan r achar Says:

    hello sir, i am doing master degree and this information helped me a lot so please keep posting

    Reply

  8. Edu Blog Says:

    Thanks for taking to write up clearly about the types of Life Insurance Schemes. It’s worth sharing. Looking forward for more.

    Reply

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