In India, there are different types of life insurance policies, and every kind of plan have distinct features and benefits. Read on to know about the best life insurance options and which plan to choose based on your needs.
It is no doubt that a life insurance cover is a necessity for all. Irrespective of your current financial status, you must be adequately prepared for the uncertainties that may occur at any time. Premature demise, accident, or critical illness may disrupt the finances of your entire family. In some cases, this could lead to several financial hardships to the surviving members of the family. However, you can prevent all this and safeguard the financial future of your family by having a life insurance policy. It is vital for covering the debts that you may have and help your family maintain the standard of living even in your absence.
In India, there are different types of insurance policies. Some policies, like the term policy, is a simple insurance plan that provides only life cover. There are other plans like the ULIPs and the retirement plans that not only provides life cover but also provides investment and savings opportunity and get valuable returns on your investment.
Let us look at some of the popular life insurance options available in India.
Term Life insurance
This is a pure protection policy that pays a compensation (sum assured) to the appointed nominee in case the policyholder passes away before the end of the policy term. It has a policy term of five years to 30 years and has the most affordable premium; you can buy a term insurance policy for a premium as low as 500 INR. The term life insurance is ideal for you if you are looking to secure the financial future of your family against all the debts without paying an exorbitant premium.
Unit Linked Insurance Policy is a uniquelife insurance plan that offers the dual the benefit of insurance cover as well as an opportunity to invest in the money market. The ULIPs have a policy term ranging from 10 to 20 years, and the death benefit is paid to the nominee in case you pass away while the policy is active. Unlike Term Policy, ULIPs also provide a maturity benefit, which is paid after the end of the term. The premium of ULIPs can be high since a part of the amount is used for the insurance cover, and the other part is invested in different funds based on your choice. The ULIPs are an ideal choice of insurance plan if you are looking for a medium-term investment that yields valuable returns. Read more on Digital signature Online
Endowment Policy is an investment-cum-protection policy that has a term ranging from 10 to 35 years. Under this plan, the death benefit is paid to the nominee, and the amount paid includes the bonus accumulated over the years. Apart from the death benefit, you are also entitled to receive a maturity benefit if you survive the policy period. The cost of the premium for endowment policy is generally high, and it is an ideal plan if you are looking for an insurance plan that lets you multiply your investment.
Whole Life Policy
This type of life insurance plan, as the name itself suggests, provides cover for your entire life. It can range from 30-40 years or more. It is a protection plush savings plan, which invests in various investment instruments. It pays the sum assured, or the death benefit to the appointed nominee and the maturity benefits are paid when you attain a certain age (as specified in your insurance policy). The death benefit payout includes the sum assured as well as the bonus earned over the years.