In the past few years, it is seen that the life insurance sector has become one of the rapidly growing sectors in India. The requirements of people are different; thus insurance companies have introduced many types of life insurance plans from which you can choose the most suitable one. Ultimately, the objective of each plan is different. Here is a list of five most common types of life insurance in India.
Term Insurance Policy
When there is a need for life insurance to cover any specific goal or a particular period, term insurance is the best suitable option for you. Term insurance is the pure life insurance policy that offers life coverage for a particular period. If any unfortunate event occurs within the policy term, death benefits will be paid out. But if the life insured survives the policy tenure, he will not get any survival or maturity benefit from the policy. Since it is not a cash-value plan, the premiums are comparatively lesser than other life insurance policies.
Whole Life Insurance Policy
Whole life policies are meant to provide coverage for your entire life. Unlike term policies, these plans offer death benefits and survival benefits too, whichever occurs first. Though the policy is labelled as whole life insurance, it provides life coverage until the age of 100 years of the life insured considering the general life expectancy. As soon as the person completes his 100, the policy gets matured, and the benefits along with the bonuses are paid.
Endowment plans offer you both savings and life coverage. A specific maturity period and lock-in period is defined by the insurance company. In the event of uncertain demise or maturity of the policy, the insurance company pays-out a lump-sum amount to the policyholder along with the bonuses if any. A significant advantage of the policy is- it nurtures the habit of savings into you over a period.
Money Back Plan
Money back plan is one of the most preferred life insurance policies in India, as it offers a portion of sum assured after each particular instance. In case of unfortunate demise, the entire sum assured is paid to the beneficiaries as decided at the commencement of the policy. If the policyholder survives the tenure, the remaining sum assured is paid as a maturity benefit.
Annuity plan works more or less similar to the term insurance, aiming to support in case of income loss. A regular income gets interrupted at the time of retirement; hence safeguarding the retirement, annuity plan ensures that your income continues flawlessly in the form of pension. Annuity life insurance policies guarantee your financial independence even after your retirement.
The plans enlisted above, are the five most common plans people prefer to choose when it comes to buying life insurance policies. Safeguarding your life is always better, and even better to take care of your loved ones financially!