Life insurance is the buzzword today. In these erratic times, getting a solid and ample insurance cover has become very important. Life insurance policy is nothing but insuring the life of an individual by way of little payments made as per decided rules, to be paid back to the insured persons family on his death. Today, life insurance plans have evolved and there are a lot of policies and plans to choose from. Today one can even compare life insurance of one company with that of another.
So here is a little enlightenment on the different types of life insurance policies offered by various insurance companies today:
♦ Term Insurance Policy: In a term insurance policy, the policy holder’s family would be paid the insured amount on his death. This is a pure risk cover. The sum insured would be eligible to be paid only when the insured person dies during the period of the policy. In case if death occurs after the term of the policy is finished, no amount is paid by the insurance company. Term insurance polices are thus a low cost option and not a very good option when in comes to long term investments.
♦ Whole Life Policy: In a whole life policy, the policy holder is to pay the amount of premiums for a period spanning his entire life, unto death. This type of policy is simple enough and there are no stringent rules or regulations for the policy holder. Thus it can be said that the whole life policy is one of the least popular of the policies offered by insurance companies today.
♦ Endowment Policy: If one life insurance plan is popular among the masses, it’s the endowment policy. In an endowment policy, there is ample risk cover as well as scope for long term savings and investment. In this when the death of the policy holder occurs during the policy period, the family gets the sum assured. however if the person survives at the end of the policy period, he would get the sum assured in any case, along with some extra benefits like bonus. Endowment policy ensures that the insured person gets a lot of extra benefits other than just basic risk cover. Other options like double endowment, marriage endowment and even education endowment plans can be availed. Due to all these reasons, this policy is a little expensive, but the benefits far outrun the costs.
♦ Money Back Policy Notes: The very basic idea of getting a Money Back Policy is just that – getting money back whenever there is an emergency situation. The various reasons why there may be a need for urgent cash liquidity is in case of marriage, paying for education, major home repairs, etc. the policy holder would be paid a sum of the sum assured at regular intervals, and the whole remaining sum at the end of the policy period. In case the death of the policy holder occurs before the expiry of the term of the policy, the entire sum assured would be handed out to his family.
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