Are you taking Life Insurance? If asked, they will say that they have taken it. Someone in the family must have taken out life insurance. But if you ask about the benefits, no one knows much. This includes what is life insurance? What are the types of it? In terms of life insurance, benefits are available in two ways. The first is Death Benefits. That means if I have insured, the benefits will go to my nominee after my death. No benefits are available to the surviving person. All the benefits of the deceased will be available to the family members. You take death insurance to secure your family.
What types of things can you consider when buying life insurance? Before taking life insurance you should know your requirements. You need to understand what kind of insurance benefits, to whom the benefits should be claimed, how much amount should go to the nominee. Select the right Policy to calculate as per your requirement. There are total 7 types of life insurance and you can know which one is suitable for whom.
Seven Types of Life Insurance:
Term Life Insurance
Money Back Plans
Whole Life Plans
Child Insurance Plans
ULIP (Unit Linked Insurance Plans)
Endowment Insurance is the most popular of these types of insurance. This is also called Traditional Insurance. In this policy, the policy amount will be paid whether you are alive or not at the end of the annual premium. In this, if you have done insurance for 30 years, you have to pay 20000-25000 per year. At the end of 30 years you will get 10 lakhs and bonus amount.
The difference between Money Back Policy and Endowment Insurance Policy is that in Money Back Policy, your money is returned little by little over a period of time. If you need money at regular intervals without waiting for long years then you can use Money Back Policy. The next commonly suggested insurance policy is Term Life Insurance policy. If you are taking Term Life Insurance for 40 years, you will have to pay 6000 to 12000 per year. In this insurance policy, if you are taking the policy till the age of 65, the policy amount will be available only if you die within that age. You will not get the amount if you die above 65 years of age. This is called Pure Life Insurance.
A Whole Life Insurance Policy is valid for up to 100 years. But your annuity may be higher. If you are taking the policy for 20 years then you will have to pay 10000 to 15000 as annual amount. Child Insurance policy is similar to Endowment Insurance. In this policy, the policy amount will be paid even if you are alive or not, at the end of the annual premium. The amount will be paid once in 10 years or once in 5 years. You can use it for your child or for education.
One of the most used policies out there is the ULIP policy. That means Unit Linked Insurance Plan policy. This ULIP policy is a combination of Mutual Fund and Insurance. Half of the amount you pay will be invested in Insurance and the remaining half in Mutual Fund. Commission is very high in this ULIP policy. Sum Assurance amount is not available in full in ULIP plan. Sum Assurance amount depends on the current amount you have invested in Mutual Fund and Insurance.