Different Types Of Life Insurance

Different types of life insurance

Insurance is like adding a level of intention to every area of your life. A life which is an ocean full of uncertainties, insurance acts like a life jacket which helps you sail through high and low tides of life.

Have you ever given it a thought, that what would happen to your family if something happens to you? Afterlife may or may not exist, but insurance definitely would play the role of an invisible well-wisher and help your family sustain their financial needs. 

Have you heard the story of Mr. Gupta?  

Mr. Gupta is a 45-year-old businessman operating in Surat. Having a family of 7 members, he has always been stressed about what happens if something happens to him. On his father’s advice, he meets the investment consultants of Surat and figures a way out.

After going through different plans, he opted for a plain-vanilla term plan where he had to pay a premium of Rs. 37,642 for a sum assured of Rs. 1 crore. He could thus, break the stress chain and focus on other important aspects of his life.

You can be Mr. Gupta for your family too. Let us start with what does life insurance stands for…

‘Life insurance is basically a contract between an insurer and a policyholder in which the insurer guarantees payment of a death benefit to named beneficiaries when the insured person dies.’ People usually tend to believe that life insurance is just one of a kind and a vanilla product that keeps on working for the years you pay the premium for it, but what they don’t know is that apart from being a vanilla product, it bifurcates into various other types which are further explained.

1) Term plan: The simplest form of life insurance plan which provides death risk cover for a specified period. In the case where the life assured passes away before the maturity, the company pays the death benefit to the nominee. 

2) ULIP (Unit Linked Investment Plan): A broad combination of insurance and investment where the premium paid towards it is partly used as a risk cover and partly is invested in funds. One can invest in different funds offered by the insurance company depending on his risk need.

3) Whole life insurance: It guarantees whole life protection to you and your family so that you can be assured that your family is protected against financial loss that may happen after your death.

4) Endowment policy: A life insurance policy that provides you with a combination of insurance cover as well as a savings plan. On the other hand, polices are typically traditional- with-profits or unit-linked. It helps you in saving regularly over a specific period of time so that you are able to get a lump sum amount on policy maturity if the policyholder survives the policy term. However, in case of sudden death, the sum assured is paid to the nominee along with the bonus, if any. Endowment plans are usually for shorter maturities as compared to whole life insurance. 

5) Child plan: This type of plan, helps in building funds for your child’s education and marriage. Most of the plans provide annual installments or a one-time pay-out after the age of 18 years. In case of unfortunate events or the insured parent passes away, either the company will make immediate payment of the sum assured to the family or waive off the future premiums.

6) Money back plans: It is a unique type of life insurance policy wherein a percentage of the sum collected is paid back to the insured on regular intervals as a survival benefit along with the bonus declared by the company. This way the holder can meet short term financial goals.

‘Life insurance is like a parachute; if you don’t have it the first time you need it, there is no second chance.’ Understand. Buy your life insurance from the best insurance agent in Surat, today.