Types of Life Insurance Plans in India

 

Types of Life Insurance Plans in India

 

There are various categories of life insurance plan available in India as discussed below: 

1. Term Insurance Plans: 

In absence of your loved one, this type of term Insurance plan helps your family become financially independent. Term Insurance plans are the basic form of life insurance plans and are also called ‘Pure Protection Plan’. These plans offer the sum assured to the family members in an event of the sudden demise of the policyholder during the policy tenure. This policy promises to offer high insurance coverage with a minimum premium amount.

2. Unit-Linked Insurance Plans (ULIPs): 

A Unit-Linked Insurance Plan is considered both a policy and an investment as well. This policy offers a death benefit i.e. this policy pays an amount on the death of the insured to the nominee and if the policyholder survives the term of the ULIP, he/she can also get the maturity value of the ULIP. This policy provides a combination of benefits of protection and saving in a single plan.

3. Endowment Plans: 

An Endowment Plan provides life cover as well as an opportunity to the policyholder to invest their money for a specific period of time. It is a type of insurance policy that gives you life insurance protection, maturity benefit, and tax benefit in one package. It is a type of life insurance with the dual purpose of providing a good investment tool and life coverage as well.

4. Whole Life Insurance Plans: 

Whole Life Insurance plans stay in force till the policyholder passes away. These policies have no expiration date. Whole Life insurance is also considered ‘Permanent Life Insurance’ as they generally have higher premiums than any other life insurance plan. Premiums for whole life insurance plans are fixed on the basis of age of issue and the premiums do not increase with age.

5. Child Plans: 

Child plans serve the dual purpose of providing insurance and providing the opportunity for an individual to save for a child’s future. This plan provides a lump sum amount at the end of policy tenure that can be utilized as financial support for your child’s educational expenses or marriage expenses.

6. Retirement Plans:

 Retirement plans are one of the insurance plans that provide the policyholder with life cover and helps them to accumulate their savings over a certain period of time. This plan helps to create a regular income post-retirement for any financial requirements post requirement.

7. Money-Back Plans: 

Money Back plans provide life cover to the policyholder during the policy tenure and also provide maturity benefits in installments as survival benefits provided after certain periods of time. These plans offer to pay the whole sum assured amount at the time of the untimely demise of the policyholder without deducting the amount paid as survival benefits.