Life insurance is a product that pays out a sum of money either on the death of the insured person or after a set period in return for a specified premium. Are you the one who is looking for life insurance but confused, which one to subscribe to?
What are different types of Life Insurance? There are 3 different types of life insurance one can subscribe to:
1. Term Plan Life Insurance Term life insurance is a form of life insurance that ensures the payment of a given death benefit if the insured person dies within a certain time period. .
2. A ULIP ULIP stands for Unit Linked Insurance Plan, it is a multi-faceted life insurance policy with the full name of ULIP. A ULIP is a life insurance and investment plan in one package.
As a policyholder, you must pay recurring premiums, a portion of which is used to provide life insurance coverage. The rest is combined with assets received from other policyholders and then invested in financial instruments in a manner similar to mutual funds.
By purchasing a ULIP, you may protect yourself against financial disasters while also increasing the value of your money. ULIP, in simple words, offers Insurance plus investment benefits to the policyholder.
3. An endowment plan Endowment insurance is a type of life insurance that combines both insurance and savings for the policyholder. It enables policyholders to save consistently over a certain length of time to receive a lump sum payment at policy maturity if they survive the policy term.
According to the policy terms and circumstances, the policyholder receives his or her sum insured at a future period. However, if the policyholder dies unexpectedly, the insurance company will pay the sum promised plus any bonuses (if any) to the policyholder's nominee.
It can also be used to protect yourself or your family after retirement or to satisfy a variety of financial demands.
Which Insurance Policy to Buy? Insurance is a pure product to hedge life risk. Investment should never be made using insurance products.
A Health Insurance Policy would usually cover costs spent fairly and necessary in respect of each insured individual within the following headings, subject to an overall ceiling of sum covered. If you want to provide a sense of security for your loved ones, life insurance is something you should think about adding to your financial plan.
A life insurance policy's proceeds might be used to cover funeral costs, pay off debts, or pay for day-to-day expenses. What you need and want a policy to do for you might determine whether life insurance is a good investment.
Things you should remember while taking insurance: Evaluate the need for a life insurance Be careful with the customizations Carefully evaluate the amount of cover, the age until which it should cover you. Disclose all the medical history to the best of your knowledge.