Life Insurances 143 views
While making your life insurance buying decision, it is important to understand the insurance benefits first and make the decision accordingly. The main thing you need to understand while buying any insurance is understanding the basic difference between various insurance products. You must be well-aware of the differences and benefits offered by the different policies. You must know, which policy is the best for achieving your financial goals. You must understand, why do you want to buy a specific policy? Compare different policies, understand their terms and conditions and know their benefits before buying any policies. The policies are available for different tenure from 10 years to 20 years and with multiple benefits., You should choose the most suitable for yourself. Choose a policy, which offers you maximum coverage and benefits on your invested money. Below are different kinds of life insurance policies that one can buy as per their needs. Let's understand the difference of these policies for making the right move.
Term Insurance: In term insurance you are required to choose a specific period of time with term insurance. In this kind of life policy, if you met with sudden death or total permanent disability, your dependants will be given the benefits as per mentioned in the policy. In term insurance, no benefits is normally payable if the life assured survives the term.
Whole life insurance: With these kinds of policies you can secure your loved ones. With whole life insurance, you are guaranteed lifelong protection. This kind of policy pays out a death benefit. Here, you are fully assured that in your absence your family will not face any financial issues as they will receive the assured sum after your sudden death. It is also a good way to securing their life financially in case of any unnatural incident.
Endowment: These kinds of policies are saving linked policies with a pre-fixed maturity tenure. If you will face any unfortunate disability or death during the period of the policy, the sum assured will be paid to your nominees. In case, you will complete the policy term, the maturity amount will be offered to the policy buyer.
Money back plans or cash back plans: In this type of policy the certain percentage of amount of the sum assured is returned to the insured person periodically as survival benefit. Once you complete the tenure of the policy the remaining amount is paid as the maturity value. Generally, the life risk may be offered for the full sum assured during the term of the policy without considering the survival benefits paid.
Children policies: Generally, such policies are bought by the life of the parent/children for the benefit of the child. These kinds of policies are beneficial for building financial equity for your child's future. In such policies you will receive premiums at different stages and period. However, there are policies, which also provide the benefit of premium waivers in case of unfortunate death of the parent/proposer before the tenure completion of the policy.
Annuity plans (Pension plans): In present kind of work culture, the procedure of pension is totally discard from the companies part. In such uncertain situation, you need some survival amount to support you once you retire from your present job. The pension plans are ideal for such kinds of situation for the regular source of income after your retirement. Such pension plans offer your financial independence in your old age and give you freedom to spend your money as per your wishes. You can buy a pension plan according to your future financial expenditure and liabilities. All the policies have specific calculator, which can help you in calculating the projected money you might require as pension once you retire from your service. So, you can invest according to your present salary with comparison of your future pension amount. There are two types of pension plans:
- Immediate Annuity
- Deferred Annuity
Unit Linked Insurance Policy: Unit Linked Insurance Policies offer a good combination of protection and investment. It gives you flexibility and choice on how your premiums are invested. In such policy, you have the freedom to invest your funds according to your choice. Here, the value of your funds depends upon the present or market value of ULIP at that time. However, the policy also provides you the benefit of sum assured in case of sudden death or permanent physical disability. There are various charges imposed on these policies and the balance amount out of the premium is diverted towards your ULIP funds. You should always read the terms and conditions carefully before buying this policy. It will also help you in understanding the features of the product better.