Life is unpredictable but death is certain. If the case is so, why not have it insured? Life insurance plans credit benefit to the insured on demise. There are several life insurance plans and each of these come with unique offerings. The most popular plans comprise a fixed timeframe when the policy is in force, and benefits will be credited after death.
Let’s see the popular plans and the benefits of the same.
Term Life: Term Insurance plans give a death benefit over a time period of a fixed tenure. This is a rudimental and vital type of life insurance policy.
There are multiple subtypes of term life plans such as decreasing term plans, increasing term plans, level term plans and term plan with return of premium.
Endowment Plans: Endowment plans are mostly framed with a strong orientation towards savings. These plans provide death benefits as well as maturity benefits since its primary orientation is savings.
Death Benefit is given to the nominee if the insured person (policyholder) passes away within the policy tenure and Maturity Benefit is handed over to the policyholder if the person survives during the policy tenure.
ULIPS: Unit Linked insurance plans, commonly known as ULIPs are primarily investment-oriented insurance plans. As per the plans, the premiums paid by the policyholder are invested in the capital market. There are various types of investment funds and the policyholder is free to choose the fund where the premium will be invested. ULIPs permit fund option to choose from liquid, equity, balanced, debt, etc.
Child Insurance Plans: As the name suggests, these life insurance plans are created specifically to provide financial support to the children.
There are two types of child insurance plans:
- Firstly, the conventional child insurance plans with bonus (if applicable), maturity and death benefit, in case of death of the parents.
- Unit-linked child plans with maturity (investment premium + growth) and a death benefit.
Whole Life Plan: Whole Life Plans are identical to unlimited Term Plans. These plans cover the insured (policyholder) till 99 or 100 years of age.
Pension Plans: The framework of these life insurance plans is mainly retirement-oriented. According to these plans, the policyholder accumulates an amount from which steady allowance pay-outs are credited till the insured survives. Pension plans emanate in two alternates – Deferred pension plans and Immediate annuity plans.
The Indian insurance sector comprises 57 companies, in which, 24 are life insurance companies. Recently, the Indian government has taken several steps to empower people with more protected and cost-effective life insurance policies. The economic twists and turns in the Indian market have played a major role in determining the growth of the insurance sector. The government, powering through these twists, has taken several steps to boost the insurance industry in India.
The recent policies and rules passed by the Indian government have reduced the number of uninsured and enhanced the insurance premium for the cost-effectiveness of the insurance policies. In the financial year 2018, the gross premium reached INR 5.53 trillion with INR 4.58 trillion from the life insurance sector. All these shows the increasing acceptance of life insurance policies by the general population, thanks to the hefty benefits they bring.