Do you know how many types of Life Insurance are there? If you don’t know, it doesn’t matter. Let us know the Types of Life Insurance in 2024. You must have heard about life insurance at some point of time and you must be aware of its importance in today’s times. If you don’t know then let me tell you briefly.
In a life insurance policy, you pay some amount to the insurance company every month or three months or year. In return, if you die accidentally, your nominee gets a fixed amount, so that after you there will be no problem in the living of your family, children’s education, their marriage, etc. Whether you belong to middle class or upper class, you will definitely need life insurance.
But the most troubling question is which insurance should be taken. You might have heard about your Endowment Policy on TV, your friends might be advising you about term plans. Hearing about such different types of insurance policies and Types of Life Insurance in 2024, your mind gets confused and you take the wrong policy, due to which you do not get the full benefit from it as much as you wanted.
To remove this confusion, in this post I will tell you the types of life insurance so that you will be able to choose the right insurance policy for yourself and take full advantage of it. But first let us understand the Life Insurance policy in some detail.
What is Life Insurance?
A life insurance policy is a contract between the policy holder and the insurance company. The policy holder pays a fixed premium to the insurance company for a fixed number of years, in return for which the insurance company promises to pay a fixed sum assured money to the policy holder’s nominee if the policy holder dies within the policy term. If it gets inside,
In some policies, the policy holder also gets maturity benefits, if he survives this period.
Types of Life Insurance
- Term Plan
- Whole Life Insurance
- Endowment Policy
- Money Back Policy
- Unit Linked Insurance Plans
Let us now understand all these 5 insurance policies in details and get complete information about Types of Life Insurance in 2024.
1. Term Plan
Term insurance policies are very easy to understand. In this you pay premium to the insurance company for a fixed number of years. In return, if your death is not natural, then the insurance company gives the sum assured amount to your nominee. You do not get any maturity benefits in this policy.
Benefits of term life insurance
- In this plan, you have to pay less premium and you get more cover as compared to other policies.
Disadvantages of term life insurance
- On maturity, you get only the total premium amount and no interest on it.
2. Whole Life Insurance Policy
You get life cover in a whole life insurance policy. If you keep paying premium regularly, then in case of your death the insurance company gives the assured sum to the nominee. You can also use this policy as a savings plan.
Benefits of Whole Life Insurance Policy
- And unlike policies, it does not have pre-defined terms and conditions. The sum assured amount he receives is completely dependent on the policy holder.
- Apart from the sum assured, it also has a saving part. You can also reinvest this assured amount and let your money grow as long as you are alive. You can also withdraw some money and take a loan against this policy.
3. Endowment Policy
Endowment policy is also a mix product of both savings and protection. In this policy also, if the policy holder pays his premium regularly for a fixed number of years and his death is not natural, then the nominee of the policy holder will get the sum assured amount. Additionally, if the policy holder survives the policy term, he gets a total amount along with maturity benefits.
Benefits of Endowment Policy
- You can also make a saving plan in this policy. You can also do your goal based savings and also take a loan against this policy.
4. Money Back Policy
Money back policy is also a type of both savings and protection policy. But a big advantage is that some portion of your assured amount is available at regular intervals. So you do not have to wait for years to get the full amount. And you get the remaining amount along with bonus on maturity.
If the policy holder dies during the policy interval, the sum assured amount is paid by the insurance company to the nominee of the policy holder. Such benefits are not available in any other policy.
Benefits of Money Back Policy
- The biggest advantage of this policy is that you keep getting some percentage of the amount at regular intervals even before maturity.
5. Unit Linked Insurance Plans
Unit Linked Insurance Plan is also known as ULIP. This is a kind of investment and protection combination policy scheme. This one is a little different from other insurance policies. In this, the insurance company and fund manager are assigned. Which invests the policy holder’s money, in equity or debt.
The policy holder has to choose in which proportion he wants to invest his money, between equity and debt. However, there is no guarantee of returns. In this, the insurance company pays a lump sum amount to the policy holder on maturity of the policy.
Benefits of Unit Linked Insurance Plans
- Although there is no guarantee of returns, still the insurance company gives you good returns in comparison to other policies.
Conclusion
Before taking any policy, you should prepare your goals, why you want to take the policy. Only accordingly you will be able to make the right choice. Everyone may have different reasons. For example, in a money back policy, you get some amount as savings even before maturity, so some can go for it if savings is their priority.
Some people looking for higher returns may opt for a unit linked policy. Use your discretion before taking any policy. Take the policy only after thinking carefully, and not by following the advice of insurance agents.
