There are different types of insurance policies, which one should you buy?
There are two types of insurance policies. One purely offers protection and the other focuses on making money. It depends on you what kind of policy you want.
Insurance policies are mainly of two types.
One purely offers protection and the other focuses on making money. In the first policy, the benefit is available only on the death of the life assured.
In the second policy, the benefit is available even if the life assured is alive. There are many types of plans in each category and it depends on you what kind of policy you want.
Insurance Policies | Types of term plansÂ
There are 5 types of term plans i.e. Regular Plan, Return of premium, Staggered payout, Single premium and Increasing/Decreasing. Regular plan is the purest form of protection and gives the assured sum on the death of the life assured. The annual premium for a term plan of Rs 1 crore for 40 years for a 30-year-old individual is Rs 11,210. Death benefit is also available in return of premium. But if the life assured survives the maturity period, the plan returns the premiums paid. In this, the term can be from 10 to 40 years. The annual premium for a Rs 1 crore term plan for 40 years for a 30-year-old individual is Rs 17,969.
Term insurance plan
This plan can be purchased for a fixed term, such as 10, 20 or 30 years. Coverage is available for the chosen period in this plan. There is no maturity benefit in such a life insurance policy. That is, they provide life cover without any savings/profits component. Hence term plans are cheaper as compared to other policies. In term insurance, on the death of the policy holder during the policy term, the assured sum i.e. a fixed amount is given to the beneficiary under the policy.
Who should You buy?
In staggered payouts, the nominee receives a part of the death benefit while the remaining amount is paid in installments over a period of 10 to 20 years. In single premium, the entire premium is paid in one go. The sum assured amount can be changed in increasing/decreasing. In this, the annual premium of Rs 1 crore for a 30 year old individual for an increasing term plan is Rs 22,801. If you are doing a job and the rest of the family is dependent on you then you must buy this to secure the financial future of your family.
To Be Continued In Our Next Article
