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What are the main types of Life insurance plans?

What are the main types of Life insurance plans?

Everyone must have heard about a life insurance policy. Some of us have opted one for themselves and their family. The term “Life Insurance” itself reveals its meaning that shows to Insure your life. This is basically a contract between an insurance company and the policyholder in which the insurance provider will pay a fixed amount of money if something happens to the policyholder. For this, the policyholder has to pay a certain amount of money at regular intervals and the company will pay the higher amount. Life insurance always has a nominee who will receive the benefit of, say the insured amount.

Generally, people thought that life insurance only pays the amount after the demise of the policyholder but the fact is there are multiple types of the life insurance policy. In these policies, you can avail of the benefits along with spending your normal life. Some of these are used as investment purposes while others are helpful in your pensionary life. Life insurance policies are also eligible to get tax deduction under Section 80C and Section 80D of the Income Tax Act.

Know more about the details of various types of life insurance policies

  • Term Insurance Plan:

    In this insurance policy the insured has to pay a premium. In return, the insurance company will pay the fixed sum insured amount to the nominee after your death. This policy is for a fixed time period. In case if nothing happens to the insured person within that time interval then the premium amount will be returned back to you.

  • Whole Life Insurance Plan:

    This is a long-term plan in which the policyholder agrees to pay a premium at regular intervals for a fixed time period. After completion of that time period (maturity period), he will get the promised sum insured amount along with the interest.

  • Child Life Insurance Plan:

    Life is unexpected and it becomes more challenging when you have children. Who will take care of your children and pay for their education after you? Well, there is a child life insurance plan that you can purchase to secure your children’s future after you. This plan provides financial coverage for the future expenses of your children.

  • Endowment Life Insurance Plan:

    Alike term insurance, this will also pay a fixed amount of money after a time interval regardless of your life. This plan has a little high premium as compared to the term insurance plan. Customers can purchase this policy for a fixed time period of their choice e.g. 5,10,20,25 years or more.

  • Pension Plan:

    Post-retirement days are very difficult for old aged people. Pension insurance Plan will work as an investment in your old days. To get this, you have to invest your money with an insurance company as a premium in your young days. There are piles of pension plans available in the market that have different benefits and features.

  • Money-back Insurance Plan:

    A little different than the endowment plan, this policy gives you a high sum insured with some additional bonus. In a Money Back Insurance Plan, you will get a return in multiple parts consecutively after fixed intervals.

  • Investment Life Insurance Plan:

    Life insurance policies are a good investment option as it ensures high returns. You can purchase an investment plan to enhance your savings and lead a luxurious life in the future.

Tips to choose the best Life Insurance policy

Choosing a life insurance policy is a tough decision to make. Especially when there are uncountable life insurance companies that are upsurge in the market. Every plan available in the market has its own unique feature and benefit. So, you need to classify them and choose the one that gives a low premium. Below are some points that will surely help you to get affordable life insurance policies.

  • Check for the claim settlement ratio:

    Claim settlement ratio is the average count of satisfied customers of a company in a year. A company with a high claim settlement ratio has good credibility and more satisfied customers. This will give you a rough idea about the performance of the company for other customers. If a company is fulfilling the need of other people then it will also help to fulfill yours.

  • Customer reviews are important:

    The name of the company doesn’t give customers. You need to perform well among your competitors to stand out in the market. In modern times we look for reviews even before purchasing a pen. Then why do you skip this while choosing the most important plan of your life in which you are going to invest your hard-earned money? Reading customer reviews will also strengthen your life insurance buying decision from a particular company.

  • Estimating sum insured:

    Life insured is an investment for your future. It will be beneficial to you, if not you then definitely to your loved ones. When it is about money everyone thinks twice before investing. And when it is about high returns then you should have to think about it even more. Redeciding your sum insured will give you an idea about how much more you will get in return. Will the return be sufficient for your family after you or not? If you get a positive answer to all these questions then go for that particular sum insured.

  • Overall tenure of the company in the market:

    The market competition gave rise to multiple insurance companies in the market. Some of them are doing well while others trick the money from customers and vanish from the market. So, checking the history of the company is important. Like how long the company has been working in the market? About its shares in the company and its reliability. Trusting and investing money in a newly established company is equal to staking your money at no profit. Also, it is not sure that the company will remain in the market until your policy maturity period or not.

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