What are the different types of life insurance plans?

Life Insuranceis the most popular term in our country, owing to the large-scaleadvertisements the word is now familiar to 60 percent of the country’s population. Basically, insurance is a contract in which a person gets monetary reimbursement from the insurance company for his loss.

The insurance industry stands among the largest business industries in the world. Spread out in different countries world there numerous types of policies which can be purchased. Here are the popular life insurancepolicies which are sold in India.

  1. Term Life insurance:Term insuranceis a fresh concept by the insurance company. The concept of term insurance is easy to understand, it provides financial security to the individual during the term and gives the claim money to his or her relative in the event of the insured’s death. Some companies have launched term insurances which cover the expense of chronic illnesses like cancer, AIDS and accidents. The claim money can be used for any purpose by the family of insured.
  2. Unit Linked Plans (ULIPs): It is a combination of insurance and investment. Here, a part of the premium paid by the insured is invested in unit plans. The premium is invested in bonds, equities, debts, market funds, or hybrid funds. Before investing in ULIPs,it is important that you research about equities and bond investments.
  3. Endowment Plans: Also known as traditional insurance, this policy combines savings and insurance. In endowment plans, the company is liable to pay the insured or the nominees the entire insurance sum at the time of maturity or the insured’s death. Some companies even offer bonuses periodically which is added to the maturity amount or the final claim amount.
  4. Money back Life insurance: Money back life insuranceis a unique policy and has functionedvery differently from traditional policies. In this policy, the insured gets the premium back periodically which is ideal for people working on their short-term Some companies offer benefits along with the periodic payment to the insured. Just like other insurances, if the insured passes away during the insurance period,the premium is given to the nominee.
  5. Child plan:This one of the useful plans for parents with a young child, the plan works more like a saving planwhich can be used for the child’s future expenses like education and marriage. There are companies that offer annual payouts or a one-time payout once the child reaches 18+ years.

Insurance plans are prone to terms and conditions which can put you in a fix, in order to stay prepared you can avail other insurances like car insurance, auto insurance, motorcycle insurance, homeowners insuranceand general insurance.

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