Life insurance is an essential part of financial planning since it protects people and their families financially in the case of an untimed tragedy. The availability of many types of life insurance policies to meet various financial needs makes life insurance a well-liked investment choice in India.
In this post, we will examine the various types of life insurance policies available in India so that you may make an informed choice.
- Coverage for Term Life Insurance
Term life insurance is the most convenient and inexpensive type of life insurance in India. The beneficiary receives the promised amount in the event of uncertainty during the term. But, there is no payoff if the policyholder lives out the period. It is the best option for people who desire a substantial quantity of coverage at a reasonable rate.
The primary benefit of term life insurance is its low cost. The premiums are significantly lower compared to other forms of life insurance policies because it does not have an investment component. Term life insurance is likewise easy to comprehend and simple to get.
- Whole Life Insurance
Whole life insurance, as its name implies, covers a policyholder for their entire lifetime. Throughout the policyholder’s lifetime, premiums are paid, and during an uncertainty, the beneficiary is given the sum assured. Although whole life insurance premiums are more expensive than those for term life insurance, the coverage is permanent.
The fundamental benefit of this coverage is that it incorporates an investment component in addition to offering lifelong coverage. The insured can amass wealth over time because the premiums are invested in the market.
- Endowment Plans
Endowment plans mix different types of life insurance with savings. The policyholder’s premium payment includes a portion that is invested in the market. As the insurance matures, the policyholder receives both the amount insured and the accrued savings.
The fundamental benefit of endowment plans is that they offer both savings and life insurance. It is perfect for people who wish to put money aside for a specific purpose, like their child’s school or retirement, as well as provide financial security for their family in the event of uncertainty.
- Plans with Unit-Linked Insurance (ULIPs)
A type of life insurance policy known as a ULIP combines both investing and insurance. The policyholder can select from a variety of investment options, such as equity funds, debt funds, or balanced funds, with a percentage of the premium invested in the market. In terms of premium payment and investment options, ULIPs provide flexibility.
The primary benefit of ULIPs is that they provide both investment and insurance benefits. ULIPs are a desirable investment option for tax-saving purposes because they also provide tax benefits under Section 80C of the Income Tax Act.
- Money-Back Guarantees
Throughout the policy term, money-back policies pay the policyholder on a regular basis. The policyholder receives a portion of the sum promised on a regular basis after a portion of the premium is invested in the market. The policyholder receives the balance sum assured and the accumulated savings upon policy maturity.