Types of insurance policies You Must Know…..
Whole Life Insurance
In Lifetime Life Insurance i.e. Whole Life Insurance Plan, the policyholder gets lifetime protection. This means that the policy does not have a fixed term. In case of death of the policyholder, the nominee gets the insurance claim. Other life insurance policies have a maximum age limit, which is usually 65-70 years. After that, on death, the nominee cannot take the death claim. But the specialty of whole life insurance policy is that even if the policyholder dies at the age of 95 years, the nominee can claim. Under this policy, the policyholder has the option of partially withdrawing the sum assured, as well as taking a loan against the policy.
Traditional insurance plan
These life insurance plans are a mix of insurance and investment. But their main aim is to make money. On the basis of the time of payout, they are divided into two parts endowment policy and moneyback insurance policy. Endowment policies are both insurance and investment. The risk is covered for a fixed period and at the end of that period the sum assured along with the bonus is returned to the policyholder. Under an endowment policy, the face value of the policy amount is paid on the death of the policyholder or after a specified number of years. Some policies also pay in case of critical illness.
Money back insurance policy
This life insurance policy is a type of endowment policy. In this also there is a combination of investment and insurance. The difference is that in a moneyback policy, the sum assured along with the bonus is returned in installments during the policy term itself. The last installment is payable at the end of the policy. If the policyholder dies during the policy term, the entire assured sum is received by the beneficiary. But keep in mind that the premium of this policy is the highest.
ULIP plan | Types of insurance policies
ULIP plans also have both protection and investment. In traditional i.e. endowment insurance policies and moneyback policies, the returns are guaranteed to an extent, whereas with ULIPs, there is no guarantee of returns. Because, in ULIPs, the investment portion is invested in bonds and shares and you get units like mutual funds. In this case, the returns are based on the ups and downs of the market. However, you can decide how much of your money should be in stocks and how much in bonds.
