Types of Life Insurance | what is life insurance


Types of Life Insurance | what is life insurance


Types of Life Insurance | what is life insurance

There are five types of life insurance policies. They are kept in different categry according to the way of insurance and investment. You can take a life insurance policy according to your need. Since this is life insurance, death cover will definitely be with every policy.
In this post, we will tell you about different types of life insurance policies. Together they will also tell which people should take which policy.

1- Term Insurance Plan | Term insurance plan


2- Endowment Insurance | Traditional Insurance


3- MoneyBack Insurance Policy | Moneyback Insurance Policy


4- Whole Life Policy | Lifetime life insurance


5- Unit Linked Insurance Plan (ULIP) | Ulip

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1- Term Insurance Plan | Term insurance plan



This is the easiest and basic plan of life insurance. This is the plan which clearly explains the principle of life insurance. Nowadays every insurance company sells insurance scheme of this category. This life insurance policy only covers insurance. There is no round of saving or investment. The case is clear if the policyholder dies, then his family will receive a lump sum amount. Apart from this, no other money will be found.


As I said in the beginning, there is no investment or savings in it and hence do not expect any maturity amount or bonus from this policy. It is exactly like insuring a house or a car.
The premium of such a policy is much less than the investment cycle. This is the plan that will not burden you on your pocket. Hey, the term plan of one crore rupees can get you only eight thousand rupees annually.


If you want your family not to face problems in your absence, then take this policy. This is a very cheap plan and everyone can take it. If you take the Online Term Plan, then it will cost even less.

Examples-


LIC e-Term
HDFC Life Click to Protect

Max Online Term Plus


2- Endowment Insurance | Traditional Insurance. 



This is the most popular insurance policy and many people consider such a policy as the real insurance plan. LIC has been promoting similar policies for the last several years. Even today, insurance agents try to sell this policy.

This type of insurance policy has both life insurance and investment. A small part of your premium is spent for insurance while a large portion is invested.

Due to this investment portion, this scheme gives you money back. You get money through maturity and bonus. All the money is paid after the policy is over.

In such an insurance policy, the money spent on investment does not get much return. Rather it is in the range of 3-7%. He looks so much due to the return bonus. If the bonus is given less or not, the return will be less than this. Let me tell you that there is no guarantee of bonus received under these policies. If the company performs well then it gets a bonus.

Due to the round of investment in the Traditional Plan, the premium becomes very high. Due to high premium, you can never have sufficient life insurance through this policy.

I believe that insurance and investment should not be mixed. Separate plan for insurance and separate plan for investment. That is why I am not in favor of such a plan. But if you do not want to get into the hassle of investing separately, then invest money in a traditional insurance plan. However, due to such life insurance plan, the habit of saving is also used. Because not paying the premium on time has to suffer huge losses.
Examples:-

HDFC Life Endowment Assurance Policy
LIC Life Benefit

SBI Life Endowment Plan




3- MoneyBack Insurance Policy | Moneyback Insurance Policy



This policy is a kind of endowment policy. Because this policy also combines investment and insurance. Like all other endowment policies, a large percentage of your premiums are also used in the investment. 

Whereas insurance is provided from a small part. Due to this arrangement, the amount of insurance is not made even in the moneyback policy.
Indeed, the moneybook policy premium is the highest. Because in this policy, money is refunded only during the policy. And that's why this policy is called Moneyback. 


This process of moneyback takes place in installments. During the term of the policy, your investment money is returned back to three to five installments. The last installment is paid at the end of the policy.

Moneybook policy keeps you getting money in a few years interval. That's why this policy has worked for those people who need money in the gap between every few years. Usually this needs to be done for children's education and marriage.

MoneyBack Policy

It is a good idea to see a moneyback policy, but the interest in it is not good. A moneyback policy yields 3-7 percent interest. In other investments like PPF, EPF, ELSS etc. you can get more returns. The benefit of tax saving will also be available in these schemes.

Examples

LIC New Moneyback Plan

SBI Life Smart Moneyback
HDFC Life Super Income




4- Whole Life Policy | Lifetime life insurance


Whole Life Insurance Plan takes a lot of work from above. Because in this policy you get protection throughout life. When the policyholder dies, his nominee will get insurance claim. Even if the policyholder is 95 years old. Whereas in other insurance policies, an upper age of insurance (65-70) is fixed after which death claim is not given on death.


Due to getting a death claim you also have to spend for this policy. The premium for the Whole life policy is much higher than the general term plan.


Actually this policy is used to transfer its movable assets. In this manner you gradually prepare a sum for their heirs. After your death, these heirs get to your heirs. There is tax rebate on this policy. Apart from this, death claim for your heirs is also tax-free.


Looking at the above, this policy looks like a term plan but inside of this policy is also an endowment policy. A part of your premium is also invested in this policy. This investment increases so much that after one age its value reaches equal to the death claim. That is, the insurance company does not have to spend from his pocket on the death of the policyholder. 

Examples:-

LIC life expectancy

SBI Life Shubh Investments
HDFC Life Total Prosperity




5- Unit Linked Insurance Plan (ULIP) | Ulip


There is also a combination of protection and investment in this plan. But this is considered different from the Endowment policy. And because of the uncertainty of returns While the amount received in traditional insurance policy and moneyback policy is confirmed to an extent, there is no guarantee of return in ULIPs.


In fact, the investment portion in Ulips is put into bonds and shares. And like mutual funds, you get a unit. Now the way the value of that investment will decrease or increase, your return will also be more or less in this way. However, you can decide how much of your money is invested in shares and how much money is in bonds.


You have to bear the risk of full investment in this plan. However, in the long term, ULIP returns are better than traditional insurance plans. For the last few years the commission of this plan has also reduced the commission.


Since this plan also has protection and investment, the amount of premium is high. Actually, if you try to take the necessary insurance protection for you through this plan, then it will be difficult to pay the premium amount.
The good thing with ULIPs is that you can get tax rebate despite investing in any kind of mutual fund. Whereas if you want to invest directly in mutual funds, only ELSS will be able to give you tax exemption. Only ULIPs can give tax exemption on debt mutual funds.


Examples-

LIC New Endowment Plus

SBI Life Wealth Assure
HDFC Life Pro Growth Plus


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