Types Of Life Insurance Policies In India
Life Insurance is an important financial tool. It provides financial assistance to your family, but only in case of sudden unfortunate death. It gives a return at the end of your term, which you pay as a premium. If the policyholder’s tragic death happened during the policy’s active period, the insurance company pays good money to your nominee.
You will find different types of life insurance policies in the market. You can choose one according to your needs. After reading this, you will understand the different types of life insurance policies that will help you choose the best insurance for you.
Few types of life insurance policies offer a money back. As LIC says, “Zindagi ke saath bhi, Zindagi ke baad bhi”
Types of Life Insurance Policies:
- Term Insurance
- Critical illness
- Unit Linked Insurance Plans (ULIPs)
- Endowment Insurance
- Child Insurance
- Retirement Insurance Plans
Term Insurance:
Term life insurance policies are a type of life insurance that secures your family’s financial future. If something unexpected happens to you, you can secure your family’s future if there is a life insurance policy.
Term insurance is not a market-driven policy. Its premium is generally low compared to other types of life insurance policies. Term insurance is a good way to invest your money correctly.
It is a model that covers many risks. You get money not only in case of death. You can choose the term life insurance policy for various purposes. For example, you can take out money to meet your daily expenses, repay an outstanding loan, and much more.
Some term insurance policies provide an extra layer of protection. Critical illness is also covered. Suppose a policyholder dies, they can cover the risk for their family with a small increase in the premium amount.
Critical Illness:
Critical illness life insurance covers diseases mentioned in the insurance bond. Taking a critical illness life insurance policy is better. That policy will save you a large amount in a medical emergency.
Most insurance companies cover diseases like cancer and heart problems. It depends upon the insurance company and which condition they cover. Everyone should choose the one that suits their needs from different types of life insurance.
Unit Linked Insurance Plans (ULIPs)
Unit Linked Insurance Plans cover both investment plans and protection. ULIPs provide life covers that protect your family from financial problems. In addition, they offer multiple funds to invest your money. Some ways are through equity, debt, hybrid, etc. Unit Linked Insurance Plans are a smart way to secure your future.
Out of the different types of life insurance, ULIPs offer attractive benefits like loyalty additions. The wealth booster option is another one to help you earn more money with changing times.
The maturity amount of ULIPs is tax-free under Section 10(10D) of the Income Tax Act of 1961. Finally, it allows you to earn money with market-linked returns and systematic investment plans.
For Example– Amit is a 30-year-old man who purchased the ULIP with a policy term of 20 years. He pays 5000 rupees per month as a premium for 20 years. The life cover for this plan stands at 3.6 lakh rupees. On maturity, Amit will get returns according to the performance of the funds he chooses. This signifies that the maturity benefit with a 4% return will be 9.05 lakh rupees and an 8% return will be 13.9 lakh rupees. If Amit suddenly dies, then his family will receive the death benefit as the sum payout.
Endowment Insurance
Endowment Insurance is the opposite of a Unit Linked Insurance Plan. ULIPs have a market-linked return system. In the case of Endowment Insurance, you are offered guaranteed returns. They cover both your investment and insurance needs. It gives you plans to save regularly for the future.
The premium you pay is divided into two parts. One part is for the death benefit. The other is invested. Suppose you die, the family gets the death benefit of the policy.
Endowment Plans offer bonuses that are paid over the agreed sum promised. This is similar to ULIPs. You can decide the method and time frame to pay your premium. Endowment Plans are a combo of savings and insurance plans. Different types of life insurance policies give you extra bonuses. Check with the insurance representative before choosing the right policy.
Child Insurance:
As the title suggests, a child insurance plan is an important investment plan. This is for any parent who wants the best for their children. Your children’s future goals can be decided and secured with this insurance plan.
The premium is invested in your selected funds. These types of life insurance plans are designed with rising inflation in mind. That means your return is enough to support your child’s tomorrow. These plans come with a better return plan than any other policy’s fixed return models.
Child insurance plans also offer broader coverage with critical illness and accidental death benefits. These types of life insurance policies provide loyalty additions and wealth boosters. They increase your savings. Moreover, you can either pay regular or a single premium. You can also withdraw after five years of the policy.
Retirement Insurance Plan:
Retirement insurance works as a long-term investment plan. This plan helps you acquire money for your post-retirement days. Retirement plans keep you insured. You can also plan for the future of your loved ones by investing in this type of life insurance plan.
You can choose to have a stable regular income or a larger sum at once. You can also select a steady recurring income and a good amount. Early planning is an excellent way to prepare for your future and retirement plans are a suitable type of life insurance.
Final Words:
Buying a policy will affect how you will lead your life tomorrow. Choosing the best plan for yourself today is a smart decision for a better future. You are the boss. Decide what suits you best from various types of life insurance policies.
Piramal Finance now offers personal loans with just a few clicks. The professionals from team Piramal visit you personally and explain everything in detail. You will get total aid from the best. So choose Piramal for all your financial needs.