LIFE INSURANCE
Your All-season Companion Offering You Security & Wealth
Your All-season Companion Offering You Security & Wealth
Life insurance, as the name suggests, acts as a safety net for your dependents upon your unfortunate death. The coverage amount, i.e. sum assured amount is payable to your family should you die during the policy term. It comes with other benefits too, in case you have a plan other than a pure protection plan. Maturity benefits, bonuses, loyalty additions are other benefits of these plans. The payout of these depends on a spotless premium payment record. You can choose to pay the premium once, till or less than your policy term. Let’s be briefed on the types of life insurance plans.
Life insurance plans can be of the following types
Term insurance is a pure protection plan where your family receives a handsome payout should you die during the policy term. The payout can come in one lump sum, monthly installments or a combination of both, based on what you ‘TICK’ in the application form. The best part about term insurance is the fixed premium throughout the policy term, unlike other plans where premiums rise periodically. The premium depends on your age, gender, medical history, employment type, smoking status, etc.
Unit-linked Insurance Plan (ULIP) is a life insurance plan that offers you the dual benefit of insurance and investment. The premium you pay is divided into two parts - One part goes on to secure the future of your family in case of your death and the other gets invested in different financial instruments to help achieve different financial goals. Customers can choose from a list of funds - equity, debt or hybrid funds - as per your risk appetite and financial goals. Equity funds invest predominantly in companies’ stocks and come with a high-risk, high-return proposition. Debt funds, on the other hand, invest in bonds, debentures & other debt instruments. These funds suit people with a low-risk appetite by delivering conservative returns. A hybrid fund invests in both equity and debt instruments and, therefore, gives you the benefits of capital appreciation and income generation. Depending on the performance of the fund, you will get a certain value at maturity. The fund value will depend on the performance of the underlying securities over the years. Besides, ULIPs offer loyalty additions and wealth boosters to keep you interested.
An endowment plan also has life insurance and investment components. The best part is that these plans offer returns as promised at the time of policy inception. So, if you have a low-risk appetite and want a combo of both insurance and investment, endowment plans are for you!
True to its name, Money Back Plan pays you back the money that you pay as premiums to the insurer at regular intervals. A certain percentage of the sum assured is paid to the policyholder as survival benefits at regular intervals during the policy term. These plans usually offer bonuses to the policyholders as they mostly participate in the profits of the company. Bonuses are payable either upon the death of the policyholder or at the time of policy maturity, whichever happens earlier.
Planning for retirement is possible with a pension plan, an important variant of life insurance. This plan seeks to fill the gap created due to lack of regular income during your ‘Sunset Years’ by paying you annuities at specified intervals. You can purchase an annuity plan by paying a lump sum amount or via premiums at regular intervals. Further, you can buy a single-life or joint-life annuity plan. In a single-life annuity plan, the payment stops after the death of an annuitant. Whereas, in a joint-life annuity plan, the payment continues for the surviving annuitant after the death of the other annuitant.
Life insurance companies also offer child plans by which your kids can get the much-needed financial support to pursue their studies and achieve their aspirations. In case you die during the policy term, the insurance company will pay the designated nominee the sum assured as agreed upon at the time of policy inception. Usually, these plans with a waiver of premium upon the death of the parents.