It’s important to get yourself a life insurance policy which will secure the future of you & your loved ones in this volatile world. However, choosing the best life insurance policy for you can be difficult given the varied options available in today’s time. Therefore, in this article we present to you various valuable insurance policies & their aspects in detail. This will help you to choose the best life insurance policy for you according to your needs & budget. Let’s begin with the first one which is Term insurance plan.
Term insurance plans are also known to be pure protection plans. Term insurance plans cover the uncertainty of premature death. In such a case when the insured dies before the plan’s term then the nominee gets a lump sum amount. Term insurance plans are the cheapest forms of life insurance. Now let’s have a look at the various categories in term insurance plans. They are as follows-
Level Term plan
In a level term plan, the nominee gets a fixed sum of amount for the complete term. It is known to be a fundamental term insurance plan. For example, consider that the sum assured is Rs.10 Lacks when the policy is accepted by the policy holder in the beginning. Therefore, after the death of the policy holder, nominee will get Rs.10 Lacks only at any period of time during the term of the policy.
Decreasing term plan
Decreasing term insurance plans provide a cover on housing loan or any property loan. In terms of decreasing term insurance plan, the sum assured will be within the outstanding value of your home loan. When your outstanding loan amount falls then the amount the insurer has to pay also decreases. Now let’s have a look at the whole life insurance plans.
Whole life Insurance plan
Whole life insurance plan sustains for the whole life of the policyholder. Nominee gets the benefit amount after the demise of the policyholder. In this case, one has to pay higher premiums than level term life plans which were discussed earlier. Earlier many insurance companies made the payment at 100 years of age. However, now they have decreased it to 75 years. Whole life insurance plans are good options for generating long-term savings for children & descendants. Guaranteed death benefit, fixed annual premiums & guaranteed maturity amount are the benefits of these plans. However, actual rate of returns do not compete with returns of other savings options. Now you can study the Endowment Assurance plans.
In an Endowment assurance plan, the policy holder gets a risk cover during the policy term & a good amount after the policy ends. It’s a good option for people who want high & guaranteed returns after the policy term is completed. Hence, they form decent long-term savings option. However, endowment assurance plans are expensive unlike the whole life plans due to the higher short premiums. Further you can browse through the benefits of money back policies.
Money Back Policy
Money Back Policies prove to be good options to help you in systematic planning of your finances. In this plan the policy holder gets guaranteed returns at regular intervals. Money back policies give you an insurance cover; tax benefits, a regular income & bonus amounts. Now let’s study the popular insurance plans known as ULIPS.
Unit Linked Insurance Plans
Unit-linked insurance policies are shortly termed as ULIPS. ULIPS comprise of mutual fund & term insurance plans. The insurance company decides the premium amount which the customer has to pay based on certain factors. Some of these factors include fund management charges, mortality charges & premium allocation charges. Insurance companies then invest the remaining amount in a fund based upon the fund’s NAV at that particular date. With the help of ULIP plans, you can manage your liquidity & venue of investments efficiently. Further you can understand the benefits of a pension plan.
Pension / Retirement Insurance
Pension plans help you to generate a corpus throughout your working tenure so that you live a secured financial life after you retire. After you retire, you will receive the pension amount on a regular basis. It can be monthly or yearly as per your choice. In an Immediate Annuity Pension Plan, the policy holder has to pay a lump sum as premium amount at the start. The insurance company then immediately starts to pay the annuity amount to the policyholder.
Hence, now you know the various insurance plans & their benefits. This will act as an important tool for you to choose the best insurance policy for you.