What Are Different Types Life Insurance Plans?

Most experts believe that a reliable life insurance programme is the first pillar in the financial planning base of an individual. There are different types of life insurance schemes that provide a definite return to the completion of financial targets, protect retirement accounts and guarantee a constant stream of income even through risky periods. These good aspects make life insurance a must-have.

How To Choose a Life Insurance Plan?

Choosing a strategy that fits your needs is crucial. Depending on your needs, there are various life insurance plans available in India. For example, your purchase of life insurance may vary based on your stage of life. There are policy choices for those who choose to invest for the future, financially care for children, secure parents or plan their own retirement.

Knowing the various life insurance plans is a good first step.

1. Term Life Insurance - A term insurance plan gives cover over a defined period of time. If the policyholder dies within the term, the policy sum shall be paid to the beneficiary. However, the recipient shall not be paid any money if the policyholder lives beyond the term of the insurance.
2. Whole Life Insurance - Life insurance is a lifelong insurance scheme.Whole life insurance pays a death benefit so that you can be confident that your family is safe from financial damages that could result when you pass. It's also the perfect way to build an inheritance estate for your descendants.
3. Child Plan - Parents may apply for an insurance scheme for their children that guarantees the financial stability of the child through their growing periods.
4. Unit Linked Investment Plan - ULIPs are financial instruments that give the policyholders the value of both life protection and wealth creation. The maturity benefit under these plans is generally payable as the fund value of your investment as on the date of plan maturity.

You may also like to read:- Factors To Consider While Purchasing A Term Insurance Plan 

1. Money Back - This scheme provides a profit on the basis of a certain proportion of the value of the periodic insurance. When the period ends, the remainder shall be paid as the amount of the maturity.
2. Endowment - This policy is an investment scheme related to savings with a fixed expiration date. If the policyholder died within the course of the plan, the balance covered shall be paid to the beneficiary nominated. Under the event that the policyholder lasts the lifetime of the policy, the proceeds of maturity shall become available to the policyholder.
3. Retirement Plan - Pensions are perceived to be the best way to guarantee a sustained income following retirement. Such post-retirement benefits provided by employers, such as the Provident Fund and the gratuity received at the end of professional life, help you get a set predetermined sum paid when you hit retirement age. Indian buyers can also select between:-

• Immediate Annuity - For an instant annuity, the annuity payout starts as soon as the individual retires. When you buy it, you pay for an instant annuity as one lump amount.
• Deferred Annuity - The deferred annuity shall make regular pension from the insurance provider. The issuer of the annuity shall reimburse the insurer a fixed payment before the age of the insurer or the day of the insurer's term. The insurance company then disburses the funds to the annuitant.The issuer of the annuity has the option of encasing 1/3 of this corpus fund upon arrival at the age of the vesting or the day of the vesting. The remaining 2/3 of the fund is used for the purchase of annuity.

Also Read: How to Save Money While Buying a Life Insurance Policy?

Conclusion

Your life is really valuable. Be judicious when considering a life insurance plan because it helps you to support your family in your absence. Do remember to make rational choices. Based on your needs, financial goal, and risk appetite choose the plan which best meet all your requirements.