Types of insurance
What you should know about the various types of insurance policies before getting insured.
All policies are not the same. Some give coverage for your lifetime and others cover you for a specific number of years. Here is a snapshot of the types of policies and what they offer.
Term Insurance
Term insurance covers you for a term of one or more years. It pays a death benefit only if the policy holder dies during the period the insurance is in force. Term insurance generally offers the cheapest form of life insurance. You can renew most term insurance policies for one or more terms even if your health condition has changed.
However, each time you renew the policy for a ...view middle of the document...
This plan is ideal for planning special moments like a wedding, your child's education or purchase of an asset, etc. Money back plan have "participating" and "non participating" versions in the market.
Endowment Assurance
Endowment insurance is a level premium plan with a savings feature. At maturity, a lump sum is paid out equal to the sum assured (plus dividends in a par policy). If death occurs during the term of the policy then the total amount of insurance and any dividends (par policy) are paid out.
There are a number of products in the market that offer flexibility in choosing the term of the policy namely you can choose the term from five to 30 years. There are products in the market that offer non participating (no profits) version, the premiums for which are cheaper
Universal Life
This is a flexible life insurance policy and is also market sensitive. You decide on the several investment options on how your net premium are to be invested. While the mony invested has the potential for significant growth, such funds are subject to market risks including the loss of the principal.
Unit Linked Product
Market-linked plans or unit-linked insurance plans (ULIP) are similar to traditional insurance policies with the exception that your premium amount is invested by the insurance company in the stock market.
Market-linked insurance plans (MLP) mimic mutual funds and invest in a basket of...