What Are Life Insurances? What Are Their Types?

Insurance cover helps cover the investor or the entity they get insured to be protected financially in case any mishappening occurs with them this could be done by availing services from the insurance companies out there.

One can get insured by paying a small fee called premium payments depending upon the kind of insurance they choose and the payment option they select. They get insured and have the insurance company to compensate for the person or object that is insured. One has to go through a medical and age is one of the determinants in getting the insurance cover and a premium payment plan.

Importance of an Insurance Plan

Getting insurance is considered to be one of the essential prerequisites for a financially responsible adult to have . It is important to plan not only for when things go right but must plan for an unfortunate event as well; this will ensure the ability to bounce back.

Getting insurance provides for a sense of security. If there occurs any unfortunate circumstances the person who has insurance to fall back on will feel calm and safe as he is insured and has the ability to shift the newly occurring financial burden on to the insurance company.

Must Read: How Can I Check My Life Insurance Status Online?

Types of Life Insurance Plans

Life insurance is one such policy that takes care of the investor even after their passing , it looks to provide financial compensation to the family of the person insured moreover life insurance policies offer benefits such as payment of premiums qualify as tax deductions under section 80C of Income Tax Act.it helps in securing the future and promotes responsible financial habits.

Following are the types of life insurance plans available in India:

1. Term Insurance Plan

This plan provides for insurance coverage as the name suggests for a certain period from the time of purchase of such a policy. It’s one of the better entry level insurance plans for new entry level beginners who are looking to invest for the first time in their life.

2. Endowment Plan

It is one of the hybrid plans which upon investing tends to pay you benefits upon maturity along with getting you insured till policy lasts and offers benefits to your family upon death.

3. Unit Linked Insurance Plans (ULIPs)

This kind of plan looks to invest a part of your premiums in mutual funds whose benefits you can enjoy during your lifetime. Moreover it also provides insurance which will pay its benefits upon the passing of their client and their family receives financial compensation.

4. Whole Life Plans

This insurance plan as the name suggests covers the individual investor for their whole life rather than just for a specific term while one has to pay premiums only for a fixed period of time up to say 20 years and enjoy insurance cover for their entire life.

5. Child’s Plan

This is one of the plans for parents who want to invest on behalf of their child so the children get recurring payment benefits throughout their life once they turn 18 and moreover it provides for insurance cover and provides for compensation to parents upon their passing.

6. Retirement Plan

These plans are crafted so that the individuals can enjoy their life post retirement they would get a monthly pension or they could also withdraw a lump sum at the time of retirement moreover it provides for an insurance cover .

Conclusion

Insurance plans are one of the important tools that a financially responsible adult needs to plan their future and plan not only for the good that happens in life but also for any unfortunate event that might occur. There exists a wide variety of plans such as entry level plans for a specific term or plans such as child plans for which a child can get benefits throughout their life. Moreover there are retirement plans as well. There exists hybrid plans for someone looking to invest their money for benefits throughout their life as well as insurance coverage. This wide variety proves how essential a plan is for every age group and how it fits well in every person’s investment portfolio.

Also Read: What is Public Provident Fund?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.