What are the Principal Types of Life Insurance?
Selecting the right types of life insurance plans is an essential part of financial planning. However choosing between the many types of life insurance, understanding their benefits and knowing the right one for you can be an overwhelming process. Let’s first understand the different types of life insurance policies available in the market so that you can choose one based on your needs.
How many types of insurance are available-
Term Life Insurance
Whole Life Insurance
Endowment Life Insurance Policy
Money-Back Insurance Policy
Savings & Investment Insurance Plans
Retirement Insurance Plans
ULIP Life Insurance Plans
Child Insurance Policy
Group Life Insurance Plan
Let us go into each of these types of life insurance plans in detail and understand them better to understand life insurance examples better.
This kind of life insurance provides benefits to the beneficiary only if the person insured dies during a specified period. If the policyholder survives beyond the term specified, the coverage ceases without value and no payout or claim can be made.
This is one of the most affordable types of life insurance and can further be classified into level term insurance, decreasing term life insurance and increasing term life insurance. While some often try to compare term insurance vs life insurance, term plan is one of the types of life insurance itself!
A Whole Life Insurance policy is an insurance plan that provides coverage to the policy holder throughout your entire lifetime when the policy is active. These types of life insurance also have a cash value component that increases over time. You can either choose to withdraw the cash value or take out a loan as per your convenience, but keep in mind that the death benefit paid to your beneficiaries will reduce.
This life insurance policy is payable to the insured if they are still living on the policy’s maturity date or to their beneficiary if they are not. This plan provides policy holders with a dual combination of protection and savings.
A Money Back Policy gives you money during the policy tenure. Policy holders receive a percentage of the sum assured at regular terms during the policy term. If they live beyond the term of the insurance policy, then they receive the remaining portion of the corpus and the bonus at the end of the policy term.
These are the kinds of insurance plans that give you an assurance of lump sum funds for the policy holder and their dependents future expenses. They act as an excellent savings tool for both your short term and long term financial goals, they also provide the safety cover of a certain sum via an insurance cover. In these life insurance examples you can avail the dual benefit of both life cover as well as fair returns. You don’t get this in investments like mutual funds- the security of life even after it ceases to exist. Have a look at Aviva Savings and investment plans to help you understand this better.
Like the name suggests, retirement plans provide you with income during retirement. As part of retirement planning, a retirement plan can help you scope for your later years by building a corpus amount just when you will need it. When the plan reaches maturity, this corpus is invested for generating a regular income stream.
These types of life insurance provide the policy holder with the dual advantage of both protection and flexibility in an investment. The premium you pay is used to purchase units in investment assets chosen by you, the policyholder. Explore our ULIP plans to know more about this and start investing today.
Choose the types of life insurance plans based on your goals, expectations and other expenses that could come up during your lifetime. Some might say that Life Insurance is one of the safe investments with high returns in India. Ensure that you take a close look at the policy inclusions and expulsions such as life coverage, riders and other factors before investing! But the key is, start investing now, explore the types of life insurance plans provided by Aviva India!
AN July 19/22
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