Insurance is a contract between the insurance company and the insured. Under this contract, the insurance company takes a fixed amount (premium) from the insured. The insured pays damages in case of any loss as per the terms of the policy.
Life insurance means that on the death of the person who bought the insurance policy, his dependent gets compensation from the insurance company. Keep in mind that there are many types of life insurance. Life insurance should be taken keeping in mind your needs. There are 8 types of life insurance policies available in India. We will tell you about these. & Nbsp;
Term Insurance Plan
This plan is purchased for a fixed period of time. You can buy it for 10, 20 or 30 years. Coverage is available for the term chosen in the term insurance plan. There is no maturity benefit in this. Term insurance plans provide life cover without savings / profit component. Assured under the policy is given to the Sum Beneficiary on the death of the policy holder during the policy term.
Moneyback Insurance Policy
In this policy, along with bonus, the assured is refunded in installments only during the policy term. The last installment is available at the end of the policy. If the policyholder dies during the policy term, the entire assurance gets to the beneficiary.
This insurance policy has both insurance and investment. There is a risk cover for a fixed period. At the end of the fixed period, the policyholder gets the assured sum with the bonus. The face value of the policy amount is paid under the endowment policy after the death of the policyholder or after a specified number of years. Some policies also pay in case of critical illness.
Savings and Investment Plans
This plan assures the insured and his family a lump sum fund for future expenses. This type of life insurance category covers both traditional and unique linked plans.
Life insurance cover is not available in this plan. In this, you can create a retirement fund by assessing your risk. After a fixed period, you or after you the beneficiary are paid a fixed amount as pension. This payment can be on a monthly, half-yearly or yearly basis.
Lifetime Life Insurance
Lifetime life insurance provides life-long security. Upon the death of the policyholder, the nominee gets an insurance claim. This is different from other policies in the sense that in other life insurance policies there is a maximum age limit. If the policy holder dies after the age limit, then the nominee cannot claim the death claim. There is no such age limit under lifetime life insurance. Its premium is very high. The policyholder has the option to partially withdraw the insured sum. Money can be taken on loan against this policy.
It also has both security and investment. In ULIPs there is no guarantee of return because in ULIPs the invested part is put in bonds and shares and like mutual funds you get units. Returns are based on market fluctuations. However, you can decide how much money you want to invest in stocks and how much in bonds.