Types of Life Insurance

There are certain basic forms of Life Insurance. All Life Insurance policies either incorporate these features in entirety or in varying combinations.

1. Term Insurance Plans – this is the most affordable form of life insurance. It offers life cover with no savings/profits. Thanks to this, premiums are low compared to other life insurance variants. There is a payout to the policyholder only on death.

2. Savings and Investment Plans - which pays out the sum assured, along with profits, under both scenarios – death and survival. Systematic investment in long term savings and investment plans can help you in meeting your financial goals at various life stages.

3. Unit Linked Insurance Plan or ULIP – One should consider their risk appetite carefully before investing in ULIP Plans. Investments made in ULIP are subject to risks associated with capital markets. Policy holders bear the investment risks in ULIP. Various benefits like Flexibility, Transparency and Liquidity makes a ULIP all the more irresistible.

4. Money Back Plan –this is a traditional savings plan which not only helps you save for future but also protects your beneficiaries in your absence. Money back plans are a unique combination of protection against death along with periodic payments on survival at specified durations.

5. Retirement Plan (Pension Plan) –which ensures financial security after retirement without compromising your living standards. Retirement plans help in managing your investment to meet your future needs accordingly.

Which is the Best Life Insurance Policy for Me?

There are no easy or straightforward answers to this question. That is because there is no single answer that will satisfy the entire audience eligible for life insurance. Every individual has specific needs which could be some or a combination of these and with varying time horizons:

1. planning for child’s education
2. planning for child’s marriage
3. retirement planning
4. saving for emergencies and contingencies
5. saving for pilgrimage