OVERVIEW
Life insurance is a contract between an insurer and a policyholder in which the insurer guarantees payment of a death benefit to named beneficiaries when the insured dies. The insurance company promises a death benefit in exchange for premiums paid by the policyholder.
TERM PLAN
Term insurance is the simplest form of life insurance plan. A term insurance provides death risk cover for a specified period. In case the life assured passes away during the policy period, the life insurance company pays the death benefit to the nominee. Except this there is no element of investments or savings in it making it a pure vanilla insurance product enabling it to offers higher coverages at lower level of premiums.
ULIP
A unit linked Investment plan is a broad combination of insurance and investment. The premium paid towards it is partly used as a risk cover (insurance) and partly is invested in funds. One can invest in different funds offered by the insurance company depending on his risk need. The insurance company then invests the assembles amount in the capital market i.e. in bonds, equities, debts, market funds, or a hybrid funds.
OTHER TRADITIONAL PLANS
WHOLE LIFE INSURANCE
With whole life insurance, you are guaranteed lifelong protection. Whole life insurance pays out a death benefit so you can be assured that your family is protected against financial loss that can happen after your death.
ENDOWMENT POLICY
Endowment plan is a life insurance policy which provides you with a combination of both i.e, an insurance cover, as well as a savings plan. Policies 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 of the policyholder, the insurance company will pay the sum assured (plus the bonus, if any) to the nominee of the policy. Endowments plans are usually for shorter maturities as compared to whole life insurance.
CHILD PLAN
Child plans help to build funds for child’s education and marriage. Most of the child plan provides annual installments or one-time payout after the age of 18 years. In case of an unfortunate event, the insured parent passes away during the policy term, immediate payment is payable by the insurance company to the family. Some child plans waive off the future premiums on death of the life insured and the policy continues till maturity.
MONEY BACK PLAN
Money back plan 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 survival benefit.They are also eligible to receive the bonuses declared by the company from time to time. This way, policyholder can meet short-term financial goals.