The term insurance plan is one of the most popular and sought-after life insurance plans in India. This is one of the types of life insurance policy in India that you can buy for a specific period of 10, 20, 30 or more years, hence it is commonly referred to as a Term Life Plan. While some other types of life insurance policy offer maturity benefits, term insurance does not, which means that the premium being paid is pure risk premium for the coverage sought by the insured It is one reason why term insurance, being the best insurance policy in India, is comparatively cheaper than other types of life insurance schemes. Besides providing financial protection for your loved ones even when you are not around, the premiums paid on term insurance is exempt from tax under Section 80 C of the IT Act. Even the claim/maturity amount that you receive on outliving the policy is exempt under Section 10 (10D).
Since the Term Insurance offers Pure life cover, rather than savings benefits, one can opt for a significant life cover at a lower premium as compared to other types of life insurance policy which have built-in savings as well. Most companies also offer relatively higher Sum Assureds under the Term Plan.
This is one of the more recent product launches by many Life insurance companies, who have tried to club a Term Life and Money Back plan and this has also become rather popular amongst the potential life insurance buyers…A TROP insurance plan is one of the life insurance plans that not only provides a death benefit during the period of the policy, but also a maturity benefit, which is a part of the premium paid being returned to the insured post the policy period on their survival.
If one lives a healthy lifestyle, term insurance with return of premium is one of the best insurance policy in India, which also give you maturity benefits. When compared in terms of premium to the Term Life plans, the premiums are higher obviously since the insured will get back part of the premiums paid on surviving the policy period.
One constantly faces the dilemma in life about choosing between any of the two options – investment or insurance. Given this opportunity, the Life insurance industry decided to club both and offer ULIP plans in the market. An acronym for Unit-Linked Insurance Plan, ULIPs provide a life cover to the insured that protects your family financially in case of any untoward incident and simultaneously allows you /you insurance provider to invest in the equity market, so that your money can multiply while your life is actually insured. Amongst different types of life insurance, it is the one that offers life cover along with investment opportunities. Being one of the types of life insurance, it has a minimum lock-in period of five years, making it a long-term investment option for the individual that also comes with risk protection. Many plans that include benefits such as fund switching options, high returns in the long term and loyalty additions. It is very important however to note that the insured is also the investor, and will need to bear the risk of the investment. This means that the insured will have a reduced or enhanced insurance coverage based on the returns of the investment made by him/insurance company on his behalf.
Endowment policies are life insurance policies that provide the insured with the combined benefits of both Life Insurance and Savings. Life insurance can also be considered a great savings and investment tool, especially if you have set some definite goals and hence Endowment plans are perfect for savings/investments coupled with Life coverage. This means that along with giving you the life cover, they help you save money regularly over a period to get a lump sum at maturity, which can be used for any financial investment needed at that point in time. The insured will also get the maturity amount if they survive the policy tenure. Similarly, they help in improving one’s financial condition, since they are linked to the market. While investing in these policies, compare various options and settle on those offering maximum returns subject to them also being rated well on financial safety parameters.
As the name suggests, moneyback policies pay back monies regularly to the insured and are one of the popular types of life insurance policies in the Indian context especially because of the savings culture and the fact that these policies pay back monies, as decided by the insured. This policy provides the insured with money at certain pre decided intervals that can help meet various financial goals (Buying a House or Car, Children’s Education or/and Marriage, etc). Importantly since these plans are designed to pay back the insured at regular intervals in the policy period, there is a low risk element and there are guaranteed returns. The frequency and period of pay-outs differ amongst companies and the plans that they offer.
Most of the types of life insurance plans in India do not provide the insured with options to get back any monies before their tenure ends. However Money back plans pay a % (percentage) of the Sum Assured throughout the policy tenure at periodic intervals, unlike other types of life insurance plans that offer no returns till maturity. This helps in the insured achieving certain pre defined financial goals while also providing reasonable liquidity through the period of the policy.
The most important feature of the Whole Life insurance plan is that it provides insurance coverage to the insured for the entire/whole life, up to 100 years of age, which means that the insured is eligible to receive a maturity benefit under a whole life insurance policy if he/she crosses 100 years of age. However in the case of the untimely demise of the policyholder before they reach this age, the death benefit is payable to the beneficiary. This form of insurance has two components –policy benefits to the loved ones in case something untoward happens to the policyholder as well as savings called the cash value, which grows as interest accumulates over the years. One can remit payments higher than the scheduled premium, to build a corpus / cash value apart from reinvesting dividends and interest. One can also also take a loan in the Cash Value and this will not impact the death benefits. Another significant feature is that some plans offer the option to pay premium for the first 10-15 (Limited Payment Term) years while the insured gets the benefits for the entire life.
Retirement Plans are insurance plans which provides financial security and help the policy holder to create a corpus creating wealth for post retirement. Life insurance can also be used as a retirement savings tool to supplement other investment opportunities while one plans for retirement. The advantage of this plan is that this helps build a corpus for retirement, while offering the benefits of Life Cover during this period. With Retirement Plan, the insured will get a sum of money as pension during the vesting period. In case of untimely demise of the policyholder, during the policy term, the nominee will get the death benefits.
A child plan operates similar to an Investment plan, but is specific for Children. It is an Investment cum Insurance plan that helps the proposer meet their children’s financial needs. A child insurance plan will help create a corpus for their child’s future needs like education in India or abroad, marriage etc. One can start investing in these plans from the birth of your child and as parents, they get the opportunity of investing their savings into funds based on their financial goals.
This is a life insurance product designed to save for your child’s higher education expenses. In case the parachute doesn’t open when you skydive, it takes care of your child’s education. You can begin by making small investments for a short tenure and start receiving regular pay-outs for a fixed period, and by the time your child wants to switch from an engineering to a DJing course, you’ll have the money already ready.