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Types of life insurance you ought to know

Types of life insurance you ought to know

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Life insurance, due to its many benefits, is essential. However, there are various types available in the market under this insurance policy. And thus, selecting one can get a tad bit confusing.

In this article, let us look at the various types of life insurance policies and how they help. Hopefully, this will take you a bit closer to choosing the right policy.

Types of Life Insurance Policies:

When it comes to the types of this insurance, each of them offers to help secure your family’s financial needs in case something happens to you. However, each one also has its USPs and hence it is essential to choose the one that suits your needs.

  • Term insurance plan:

As the name says term insurance is a plan which is purchased for a fixed period. Generally, the policy term for this plan can range from 5 years to about 60 years. Term insurance plans offer you a significant life cover at lower premiums as compared to standard life insurance policies.

  • Endowment policy:

One of the primary reasons for opting for an endowment policy is the combined benefit of savings and insurance. This policy helps you save your money over time in addition to offering you a lump sum amount at maturity. This lump sum amount is paid to you if you survive until maturity.

  • Unit Linked Insurance Plans (ULIP):

It is a type of life insurance that offers you the option to build wealth in addition to giving life coverage. The premiums which are paid in ULIPs are bifurcated into two parts. One part of the premium goes towards providing life cover, while the other is invested in market-linked funds.

  • Whole Life Policy:

Unlike other policies which tend to expire at the end of the specified period, the whole life policy extends till the policyholder dies. Furthermore, this policy provides you with a survival benefit. This means if you survive the policy period you are eligible to receive a maturity benefit.

Before you choose:

  1. Evaluate the financial needs of your family
  2. Evaluate if the life cover is sufficient
  3. Check the policy tenure
  4. Look for additional coverage and benefits
  5. Remember to read the terms and conditions thoroughly

As mentioned earlier, this insurance is essential and hence your decision must be made with the utmost care.

In case of any confusion, you can contact the insurance company or your insurance advisor for clarity.