Types of Life Insurance
Term Life Insurance: The premium of this type of life insurance is lesser than any other life cover with no saving or profit-making element. In absence of family income, you can use the cover to pay daily expenses. It is often suggested that you should start term insurance as you start earning.
Unit-linked Investment Plan: In this type, the premium paid is partially used as insurance and partially invested in different funds. Since every individual is different, the investment done in this type is based on the risk-taking capacity of the policyholder.
Retirement Plan: This type supports making a stable financial source of income for retirement years. This life insurance pays a lump sum amount or can give a monthly payout after the policy expires. They help you in providing financial independence in your nonworking days.
Child Plan: This plan is specially dedicated to building the future development of the child. This typically helps in funding child marriage or child education. It is a vital financial planning tool for parents. It gives a one-time payment when the child turns 18.
Endowment Plan: It is a blend of insurance and savings. After maturity insurance company provides maturity benefits to the policyholder. This plan is for those who want guaranteed returns along with the life insurance
Whole Life Insurance: This type covers for a lifetime or some up to the age of 100 years. In this case, if the insurer lives for more than 100 years then all the benefits will be given to him otherwise the other nominee of the family. Most people do not live for 100 years. Therefore, It is simply meant of leaving a legacy to the children.
What is Life Insurance? – Definition, Types, and Benefits
Earlier, Insurance looks very very different than what it looks like today. From the time of ancient Rome, there is some practice that, there was a ‘burial club’ that covers the cost of members’ funeral expenses. The earliest known life insurance policy was made in London where a company insured ‘William Gybbons’ by the contract of 400 pounds if he dies within one year. The sale of Life Insurance began in 1760 in the US where the poor and distressed widows were insured. Later it started in different countries.