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Types of Life Insurance | Endowment Plan & Policies | You Need to Know
A life insurance policy provides financial coverage and a sense of reassurance for you and your family during times of crisis.
Each life insurance policy covers specific aspects and offers different benefits. Life insurance plans cover your basic financial needs and assets. Let’s take a detailed look at each type of life insurance policy.
Types of Life Insurance Policies
Term Insurance
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Term insurance is one of the most basic types of life insurance policies. In a term plan, the policyholder gets life coverage for a specific period and pays premiums for it. In case of untimely death, the beneficiary receives the insured amount. However, if the policyholder survives the term insurance period, there are no savings or profits from the policy. Online term insurance plans offer pure risk coverage, which is why the premiums for such plans are relatively low.
Whole Life Insurance
As the name suggests, this type of life insurance policy is for the entire lifetime. The coverage lasts throughout the policyholder’s life. Premiums are paid at regular intervals, and upon the insured’s death, the final payment is made to the family. Naturally, since the insurance coverage is for a lifetime, the premium amounts for whole-life plans are higher.
Endowment Plan
An endowment plan is a special type of life insurance policy. It offers a maturity benefit, meaning if the policyholder survives the insurance plan’s duration, they receive the insured amount.
In case the policyholder dies during the term, the beneficiary is entitled to the basic death benefits. Endowment plans have higher premiums to cover the insured amount along with the benefits for the possibility of death or survival.
Unit Linked Insurance Plan (ULIP)
Unit Linked Insurance Plans are slightly different from regular endowment plans. ULIP pays the insured amount upon death or maturity. Additionally, it invests in the currency markets. The policyholder can choose to invest in stocks or debt markets. Profits depend on the market performance of the investments. In short, ULIPs are a combination of insurance coverage and investment options.
Money Back Policy
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Money-back policies are also a type of endowment plan. In this, the policyholder receives regular payments during the policy term. These payments are made from the insured amount. If they survive the term, the remaining insured amount is paid out, and in case of death, the beneficiary receives the full insured amount.
Child Plan
This helps in creating long-term savings for the child’s future. Funds are a great source for the child’s education and marriage. Most insurers provide annual installments or a one-time payment after the child reaches 18 years of age.
All efforts have been made to ensure the accuracy of the information provided here. However, no guarantees are given regarding the accuracy of the data.
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