Kinds of Life Insurance Policies

Every individual has their own requirements and desires. Also, everyone has a particular budget to spend in a life insurance policy. In general insurance companies do offer a wide choice of life insurance policies in order to meet the demands of the people. Other factors leading to the variations are age group, income level etc.

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Here is a list of the various types of life insurance policies offered by the insurance companies.

Term Insurance Policy: A term life insurance policy is the most basic of all the insurance policies and can be purchased by anyone with ease. This policy offers death coverage but only for a particular time period. If a policyholder dies suddenly within his/her policy insurance term, the insurer company gives the complete pre-agreed death benefit sum (i.e. lump sum) or may offer a monthly/yearly payment as per the needs of the beneficiaries.

Endowment Policy: It is also known as the traditional life insurance policy. It offers a perfect combination of indemnity as well as savings. A fixed amount invested by the policyholder against the insurance policy and the remaining amount is invested by the insurance company. In case if an endowment policy exceeds the policy tenure, then the maturity benefit is given by the insurer company to the insured individual. The risks are lower in this case, as an endowment policy offers a part as investments and the returns are lesser as compared to other services.

Child Insurance Policy: A child plan helps in the generation of funds for the future of an insured child either for marriage or education. In most cases, insurance companies provide installments of part payments or a 1-time payment or a yearly payment, once the insured child reaches 18 years of age. In unfortunate circumstances, if the insured child passes away within the policy tenure, the child’s parents shall receive the payment immediately by the insurer company.

Whole life plan:  This policy offers coverage to the policyholder for all his lifetime. Many insurance companies offer an insurance cover up to the age of 100 years under the plan. This plan offers extensive insurance coverage in comparison to term insurance. The total sum insured is determined at the time of buying the life insurance and is owed to the noted beneficiary post the death of the policyholder along with the bonus benefits.

Money Back Plans: According to a money back policy, the policyholder receives a decided percentage of the insured amount at regular intervals as decided by the insurance company beforehand with the approval of the policyholder. It is a very unique insurance policy and the reimbursement facility is known as survival benefits.

Many times we wish to cancel our life insurance policies owing to the premium amounts that we cannot pay due to several reasons or maybe because you just miss giving your premium returns. But in the longer run, this is not a wise decision. Any insurance policy gives you and your family the much-needed security that is essential for the well being of your family. So it may seem difficult but you shouldn’t cancel your insurance policy at any time.