Types of Life Insurance
Term Insurance
Term insurance plans, as suggested by the name, are those that are purchased for a predetermined period of time. The period such as 10, 20, or 30 years. These insurance plans are less expensive than other policies since they have no cash value and, as a result, no maturity benefits. This policy doesn’t truly start to pay off until the event actually happens.
Endowment Policy
The endowment policy comes with the additional benefit that the policyholder will receive a lump sum amount in case he survives until the date of maturity, which is the only distinction between the term insurance plan and the endowment policy. The remaining terms of a term policy are the same and likewise, apply to endowment policies.
Whole Life Insurance
This policy lasts for the entirety of the insured’s life, unlike other policies that cease after a set amount of time. In accordance with this insurance, the covered individual also receives the survival benefit. Under this type of coverage, the policyholder has the option to partially withdraw the money protected. Policyholders can also borrow money using their insurance as collateral.
Plan of Unit-Linked Insurance
These plans not only offer life insurance but also give policyholders the chance to amass wealth. Two sections of the premium are paid for this insurance. The sections, one for life insurance and the other for wealth accumulation. Customers can withdraw a percentage of their money under this arrangement.
Money-Back Guarantee
An endowment policy would be analogous to this insurance. With the exception that it provides a variety of survival benefits that are dispersed proportionately throughout the period of the policy term, this is similar.
Pension or Annuity Plan
According to the terms of this insurance, the money paid in premiums is accumulated as assets and transferred to the policyholder as income via an annuity or lump sum, as directed by the insured.
Life Insurance: Its Types & Benefits
A contract between an insurer and a policyholder is how life insurance is defined. In that agreement, the insurer ensures the policyholder’s financial security and provides a death benefit to the designated beneficiary in the event of the policyholder’s demise. The policyholder must either pay multiple payments over time or a single premium in order for the life insurance policy to remain in effect. According to the agreement, the insurance company will pay the individual or his family a lump sum amount after a specific period of time in the case of the policyholder’s death or if the policy matures. Life insurance is typically only offered for a short time. As a result, life insurance is required to pay a death benefit, also known as the sum assured, if the insurer passes away during this time. Depending on the type of life insurance, the insurer may receive a maturity benefit if they live past the term.