Since life itself is uncertain, all individuals try to assure themselves of a certain sum of money.

Life insurance is taken not only to take of an individual but also family members in case of death.

The insurance company undertakes to insure the life of a person in terms of financial way in exchange for a sum of money called premium, in other words Life insurance is an agreement between the policyholder and the insurance company according to which the Insurer agrees to provide a sum assured called the death benefit in the event of an unfortunate demise of the life assured.  LI premium may be paid in one lump sum, or monthly, quarterly, half yearly or yearly.

The company promises to pay a certain sum assured either on the death of the policyholder or In case of survival of the policyholder throughout the policy tenure, a maturity benefit is paid to the life assured .Thus, the person is sure that a specified amount will be given to him when he attains a certain age & His children will get that sum in the event of his death.

How Does Life-Insurance Work?

Life insurance policy, is a legal agreement that ties both the insured and the insurance provider to each other. It contains all of the information on the terms and conditions under which the insured person or nominee gets insurance benefits from the provider.

Insurance is a means of ensuring that you and your family members are protected in the event of a financial emergency. You purchase an insurance policy for it, and the insurance company assumes the risk and provides insurance coverage at a certain rate.

The insured or nominee can submit a claim with the insurer in the event of an unforeseen incident. The insurer evaluates the claim request and covers the claim based on the claim criteria.

Types of Life Insurance:

• Term Insurance Plan
• Child plan
• Savings Plan & Investment insurance
• Term Insurance plan with Return of Premium
• Unit Linked Insurance Plans(ULIP)
• Endowment insurance Plans
• Money back insurance Policy
• Whole Life Insurance plan
• Group Life Insurance plan
• Retirement insurance Plans

Term Insurance

Term Plan policy is a pure life cover policy, and its designed in a very simple way to understand individual.  insurance company charge a premium for a specific number of years, and in return of that insurer will give you life protection cover in terms of finance in case an individual were to met with an untimely death, the insurer promises to pay the sum assured to their family. Term plan does not come with any maturity benefit whereas another option is Return of premium offered under this plan.

• It offers higher cover for a lesser premium as compared to any other life insurance products.
• ROP (return of Premium) comes with a maturity benefit, which the sum total of all premiums is paid. No interest amount is paid on ROP Amount.

Whole Life Insurance Policy

A whole life insurance policy gives you a permanent life cover. If the premium is paid regularly, the insurer promises to pay the sum assured to the nominee of the policyholder after the death of the policyholder. Along with sum assured, it also provides a saving component.

Endowment Policy

Its provides both savings and protection options. Under this plan policyholder will have to pay premium regularly on schedule for a specific number of years against that insurers promise to pay the fixed sum assured to the nominee in case of the untimely death of the policyholder & if the policyholder survives the policy term, he/she receives a lump sum pay-out as the maturity benefit as per policy designed by insurance company.

Money back Policy:-

Moneyback policies also provides a savings and protection option as like endowment plans. But the key feature of this policy is that a portion of the sum assured is paid to policyholder at a regular interval during the policy tenure & the remaining amount, along with the bonus, is paid at maturity of policy. This benefit is not available for any other life insurance policy. Moreover, if the policyholder dies in between the policy tenure, then the entire sum assured is paid to the nominee; this is despite the survival benefits that the policyholder has already received. The best advantage of moneyback policies is the liquidity it provides to policyholder i.e., policyholder receives a percentage of the sum assured at the regular interval.

Term Insurance with Return of Premium(TROP)

Traditional term insurance plans don’t provide any maturity benefits to policyholders but with the TROP plans the survival benefit offered the return of the premiums paid to the insured after deducting the tax. The difference between a basic term insurance policy and a term insurance with return of premium (TROP) is when the policy matures at that time the insurer will return the entire premium paid by the policyholder towards the policy after deducting the tax paid.

Unit Linked Insurance Plans (ULIPs)

ULIP is a linked to insurance and investment both. The investments under this plan are made in debt and equities by a fund manager assigned by the insurance provider company. Moreover, the policyholders can choose whether they wants to invest in debt or equity and in what proportion, investment return is linked to market. Though there are no guaranteed returns under this plan, a lump sum amount is paid to the policyholder at maturity. However, if policyholder dies during the policy tenure, the insurer pays nominee a sum assured.

A term plan is a pure life cover that focuses on offering policyholder family dependents the sum assured in case policyholder dies. Hence, it is a must-have for every earning member in the house.

Group Life Insurance (GLI):

GLI as the name suggests, provides life insurance cover to a defined group of people such as employees of an organization, members of a professional association, or a housing society all under a single contract or insurance policy in simple terms group life insurance is an insurance plan offered by the company or employer to its employees. Group life insurance provides coverage from various risks of life. It financially safeguards the future of your family in case any unforeseen incident happens to you. To help their employees feel safe, many companies offer group life insurance to them. Many people rely on the group life insurance plans because they are cost effective.

Saving and Investment Plans

Saving and investment plans such types of life insurance plans which provide the assurance of lump sum funds for you and your family’s future fixed expenses. While providing an excellent saving option for short term and long-term financial goals, these plans also provides your family a certain sum assured by way of an insurance cover. This types of plans is a broad categorization that covers both the traditional and unit linked insurance plans.

Retirement Insurance Plans:

These plans provide you with income during your retirement, as the name suggest. These plans are offered by life insurance companies in India and help you build a corpus for retirement.

Child Life Insurance Policy

A child life insurance is a saving & investment plan both that is designed to meet your child’s future financial needs. It provides your kids to live their dreams and gives you the advantage to start investing in the child education plan right from the time the child is born and it also offers provisions to withdraw the savings once the child reaches adulthood. Some child insurance policies do offers intermediate withdrawals at certain intervals of policy.