Types of Life Insurance Policies
- ENDOWMENT LIFE INSURANCE POLICY– It is the life insurance contract that covers the risk for a specified period, at the end of which the sum assured is paid back to the policyholder along with the bonus accumulated during the term of the policy. Apart from providing financial risk cover in case the insurer who is usually a family’s breadwinner-premature death, the insurance amount is also repaid once this risk is over.
- MONEY BACK INSURANCE POLICY– It is the type of policy that provides periodic payments during the term of the policy as long as the policyholder is alive. The balance of the survival amount along with the bonus accumulated is provided at the expiry of the term of the policy. In case of the unfortunate death of the policyholder during the term of the policy, the face value of the policy is paid to the beneficiaries without making any deduction for the periodic payments made to the policyholder during his lifetime.
- WHOLE LIFE INSURANCE POLICY– In the whole life policy, the premium and death benefit you are quoted at your policy’s start remains the same throughout the policy’s life. But because your insurer will be investing your premiums, the policy may also accumulate a cash reserve. These funds can be put to use as premiums, reinvested, or saved.
- TERM LIFE INSURANCE POLICY– It is the type of policy in which the benefits can be incurred only after the death of the insured, provided that the death occurs within a specified time period. If the insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is the least expensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis over a specific period of time.
- JOINT LIFE INSURANCE POLICY– Joint life insurance refers to the credit life insurance policy where both the borrower and co-borrower are insured. It provides coverage to two or more persons along with death benefits. When one of the individuals dies, the other is going to be paid the death benefit by the insurance company. This type of insurance is sold as a term policy in the majority of cases. A joint life insurance policy is ideal for married couples as it provides financial security and risk protection to both individuals.
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- GROUP LIFE INSURANCE– Group insurance provides life insurance protection to the lives of multiple persons, such as some or all employees of a business, or members of a labor union, or those owing money to an automobile finance company, or members of an association. It also provides insurance coverage for people in certain approved occupations at the lowest possible premium cost. The benefit of group insurance is that it covers the large segments of society and also those who cannot afford individual insurance.
- ANNUITIES– An annuity is an investment that is made either in a single lump-sum payment or through installments paid over a certain number of years, in return for a specific sum that is received every year, every half-year, or every month, either for life or for a fixed number of years.