Different Types of Life Insurance Policy in India and USA 2023
Life insurance policy offers 8 types of policies to choose from depending on your individual needs.
Life insurance policy can provide financial relief to individuals and their families in the event of their passing. There are different types of life insurance policies available in India which are tailored to individual needs. Each policy offers different benefits and options including cover and returns from savings and investments. It is important to understand the different types of life insurance policies to choose the most suitable one.
That is, it is also helpful for the person getting the insurance. There are 8 different types of life insurance policies available in India, providing the insured the freedom to select the policy that best suits their individual needs. Let us discuss the different available types of life insurance policies.
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1. Term Insurance Plan
This plan offers coverage for a specified period, such as 10, 20 or 30 years. No maturity benefit is provided upon completion of the policy. They provide life cover without any savings/profits component. Therefore, they are cheaper than other policies. In term insurance, on the death of the policyholder during the policy term, the assured sum i.e. a fixed amount is given to the beneficiary under the policy.
2. Savings and Investment Plans
This type of life insurance plan provides a lump sum payment to the insured and their family for future needs. These plans offer a useful way to save money and also provide a fixed amount of money to the family of the insured as an insurance benefit. These plans encompass both traditional and more specialized linked plans.
Type of life insurance policies
3. Moneyback Insurance Policy
This policy is a type of endowment policy. In this policy also there is a combination of investment and insurance. The difference is that in this life insurance policy, the sum assured and the bonus are returned in instalments only during the policy term. The final payment is due at the conclusion of the policy. If the policyholder passes away before the expiration of the policy, the full amount of insurance coverage is provided to the designated beneficiary. Although the premium of this policy is the highest
4. Endowment Policy
This type of life insurance has both a risk cover and an investment component. The policyholder will receive the sum assured, plus any bonus, at the end of a fixed period. Endowment policies offer a designated sum of money that is paid out upon the policyholder’s death, or upon the expiration of the policy. In some cases, payments are also made in the event of a critical illness.
What are the 7 types of life insurance?
5. Savings and Investment Plans
This type of life insurance plan provides a lump sum payment to the insured and their family for future needs. These plans offer a useful way to save money and also provide a fixed amount of money to the family of the insured as an insurance benefit. These plans encompass both traditional and more specialized linked plans.
6. ULIP
In this plan also, both protection and investment remain. The returns received in traditional i.e. endowment insurance policy and money-back policy are assured to an extent, while there is no guarantee of return in ULIP. In a ULIP investment, the funds are allocated between bonds and shares, allowing the investor to choose the proportion of each. The resulting returns are subject to fluctuations in the market.
7. Life Insurance
Whole Life Insurance Plans provide lifetime protection and in the case of the policyholder’s death, the protections extend to the nominee, who can make a claim. Whole Life Insurance Plans do not have a maximum age limit, unlike other life insurance policies, meaning that the claim can still be made even if the policyholder dies at an older age. These policies generally have a higher premium than other life insurance plans, and the policyholder has the option to partially withdraw the sum assured or take out a loan against the policy.
8. Child Insurance Policy
This child plan has been designed with consideration of the costs and other necessities associated with a child’s education. Upon the death of the policyholder, a lump sum amount is paid out, and the policy does not expire. All future premiums are waived off and the insurance company continues to invest on behalf of the policyholder. The child gets money for a certain period.
9. Retirement Plan
This retirement solution plan enables you to create a retirement fund by assessing your risk. After a fixed period, a fixed amount will be paid to you or your subsequent beneficiary on a monthly, half-yearly or yearly basis. Please note that life insurance coverage is not included in this plan.