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Types of Life Insurance

Wondering which life Insurance is the best for you?

#Life-Insurance
5:36 min read

Choosing from the different types of life insurance in India is a crucial financial decision, as it helps you protect your loved ones from life’s uncertainties. Still, you may not be fully aware of the types of life insurance policy in India and how they affect your financial health. Let’s check the types of life insurance and their benefits in detail below.

Also Read: Benefits of Term Insurance

Different Types of Life Insurance Policies in India

Following are the types of life insurance available in India: [1]

  • Term insurance
  • Term insurance with return of premium
  • Unit Linked Insurance Plans
  • Endowment plans
  • Moneyback policy
  • Whole life insurance
  • Group life insurance
  • Child Insurance Plans
  • Retirement Plans
     

Let’s dig deeper into these categories to understand how to choose one of the types of life insurance policy in India.

types of life insurance policy in India Max Life Insurance

1. Term Insurance Plan

The term insurance plan is one of the most sought-after types of life insurance policies in India. This is one of the types of life insurance policy in India that you can buy for a specific period of 10, 20, 30 or more years, hence the name.

While some other types of life insurance policy offer maturity benefits, term insurance does not. It is one reason why term insurance, being the best insurance policy in India, is comparatively cheaper than other types of life insurance schemes. 

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Term insurance is pure life cover, unlike other types of life insurance policies which have a saving component. You can also opt for a significant life cover at a lower premium as compared to other types of life insurance policy which are costlier but have built-in saving components.

2. Term Insurance with Return of Premium

A term insurance plan is one of the types of life insurance policy that provides a death benefit but no maturity benefit.

If you live a healthy lifestyle, the probability that you will outlive the best insurance policy in India you have bought also increases. For you, term insurance with return of premium is one of the best insurance policy in India, which also give you maturity benefits.

It is one of the types of term insurance plans that give back the premiums you pay on surviving the policy period. 

3. Unit Linked Insurance Plan (ULIP)

You may face a dilemma in life about choosing between any of the two options – investment or insurance.

A ULIP is one of the types of life insurance policies in India that fulfill both these aspects. Amongst different types of life insurance, it is the one that offers life cover along with investment opportunities. Being one of the types of life insurance, it has a lock-in period of five years, which makes it a long-term investment instrument that comes with risk protection. ULIPs also allow you to balance your funds as per market dynamics.

3. Unit Linked Insurance Plan (ULIP)

You may face a dilemma in life about choosing between any of the two options – investment or insurance.

A ULIP is one of the types of life insurance policies in India that fulfill both these aspects. Amongst different types of life insurance, it is the one that offers life cover along with investment opportunities. Being one of the types of life insurance, it has a lock-in period of five years, which makes it a long-term investment instrument that comes with risk protection. ULIPs also allow you to balance your funds as per market dynamics. citizen parents.

Also Read: Benefits of ULIP Investments

4. Endowment Policy

Endowment policies are one of the types of life insurance policies that provide you with the combined benefit of life insurance and savings. Along with giving you the life cover, these types of life insurance help you save money regularly over a period to get a lump sum at maturity.

What makes them one of the most useful types of life insurance policies is that they help fulfill long-term goals in life. You will also get the maturity amount if you survive the policy tenure.

Endowment policies, being one of the most appropriate types of life insurance plans, also help you create a financial cushion for your family to meet various financial objectives in life.

5. Moneyback Policy

The purpose of investing in the insurance policy in India for your loved ones can be to create wealth over an extended period. However, most of the types of life insurance do not provide any provision to get funds before their tenure ends. It is where a moneyback policy plays a vital role in solving the problem of liquidity.

As the name suggests, moneyback policies are one of the popular types of life insurance policies in India that give money back regularly. 

5. Moneyback Policy

The purpose of investing in the insurance policy in India for your loved ones can be to create wealth over an extended period. However, most of the types of life insurance do not provide any provision to get funds before their tenure ends. It is where a moneyback policy plays a vital role in solving the problem of liquidity.

As the name suggests, moneyback policies are one of the popular types of life insurance policies in India that give money back regularly. 

It pays a percentage of the assured sum throughout the policy tenure, unlike other types of life insurance plans that offer no returns till maturity. 

6. Whole Life Insurance

As a life insurance policyholder, you get the benefits depending on the types of life insurance plans. What distinguishes a whole life insurance plan from other types of life insurance is that it provides insurance coverage to the insured for the entire life, up to 100 years of age.

The death benefit is payable to the beneficiary in the case of the untimely demise of the policyholder. On the other hand, you are eligible to receive a maturity benefit under a whole life insurance policy if you cross 100 years of age.

Another significant feature of these types of life insurance plans is that some plans offer the option to pay premium for the first 10-15 years while you get the benefits for the entire life.

7. Group Life Insurance

Just like group health insurance, group life insurance is one of the types of life insurance that covers a group of people under one master policy. These types of life insurance are generally provided as part of an employment benefit.

A unique feature of these types of life insurance products is that you will get the insurance cover if you remain a part of the group. It is different from the individual types of life insurance plans in which the coverage continues throughout the chosen policy tenure.

8. Child Insurance Plans

A child plan is an investment+insurance  plan that helps you meet your child’s financial needs. A child insurance plan will help you create wealth for your child’s future needs like education. You can start investing in these plans from the birth of your child. You get the flexibility of investing your hard earned money into several funds on the basis of your financial condition and goals in mind.

9. Retirement Plans

Retirement Plans are insurance plans which provides financial security and help you with wealth creation after your retirement. With Retirement Plan, you will get a sum of money as pension in the vesting period. In case of your untimely demise during the policy term, your nominee will get the death benefits. Retirement Plans comes with death benefit as well as vesting benefit providing protection to you and your family members.

Different Types of Life Insurance Plans from Max Life Insurance

Following are some of the plans offered by Max Life Insurance:

S. No.

Types of Life Insurance

Name of the Plan

UIN

1.

Term Insurance

Max Life Smart Term Plan

UIN: 104N113V03 (Non Linked Non Participating Individual Pure Risk Premium Life Insurance Plan)

2.

Term insurance with return of premium option

Max Life Smart Term Plan

UIN: 104N113V03 (Non Linked Non Participating Individual Pure Risk Premium Life Insurance Plan)

3.

Unit linked insurance plan

Max Life Fast Track Super Plan

UIN: 104L082V04 (Unit Linked Non Participating Individual life insurance plan)

 

How to Buy Life Insurance Policy in India?

The ultimate purpose of buying any of the types of life insurance plans in India is to provide life cover to you and financial protection to your family members. To make sure that you have the best possible insurance coverage, you can first check your premium payable using term plan calculator.

With insurance policy in India adorning your portfolio, you can ensure that your family members receive the sum assured as defined under the policy terms.

Choose the Best Life Insurance Policy in India for Adequate Coverage

Choosing one of the types of life insurance in India is not easy. It is because the decision forces you to think about the unfortunate events that may occur in your life. Then, there is a financial aspect of investing in various types of life insurance plans.

You might have assumed you need to choose an insurance policy in India from the array of available variants. However, the decision of the insurance policy must depend upon how much life cover you need. For instance, if you want to ensure financial security of your family in your absence, then you need to purchase a term insurance policy, after carefully evaluating the financial needs and various factors relating to the insurance policy . 

types of life insurance policy in India Max Life Insurance

Choosing one of the types of life insurance in India is not easy. It is because the decision forces you to think about the unfortunate events that may occur in your life. Then, there is a financial aspect of investing in various types of life insurance plans.

You might have assumed you need to choose an insurance policy in India from the array of available variants. However, the decision of the insurance policy must depend upon how much life cover you need. For instance, if you want to ensure financial security of your family in your absence, then you need to purchase a term insurance policy, after carefully evaluating the financial needs and various factors relating to the insurance policy . 

types of life insurance policy in India Max Life Insurance

Also Read: 5 Things to Think Before Buying Life Insurance

If you want to support long term goals in life, the factors to be considered will be different. Keep in mind that your age and personal needs determine the most needed types of insurance plans.

Frequently Asked Questions (FAQs)

Q. What are the  main types of life insurance policies in India?

A. Following are the different types of life insurance plans available in India:

  • Term Insurance
  • Term insurance with return of premium
  • Unit Linked Insurance Plans
  • Endowment plans
  • Moneyback policy
  • Whole life insurance
  • Group life insurance
  • Child Insurance Plans
  • Retirement Plans
     

Q. What are the benefits of Life Insurance Plans?

A. Following are the primary benefits of life insurance plans in India:

  • Financial Security
  • Life Coverage
  • Long Term Savings
  • Investment Options
  • Tax Benefits under Section 80C & 10 (10D) of income tax act 1961
     

Q. What are the life insurance tax benefits?

A. You can avail various tax benefits with life insurance plans in India. Under Income Tax Act, 1961, you can avail deductions under Section 80C up to Rs.1.5 lakh on the life insurance premium paid. Also, nominee can claim tax deduction under Section 10 (10D) on the insurance payouts received.

Q. What are the different types of Insurance in India?

A. Following are the types of insurance in India:

1. General Insurance

Following are the various types of general insurance in India:

  • Health Insurance
  • Motor Insurance
  • Home Insurance
  • Fire Insurance
  • Travel Insurance
     

2. Life Insurance

Following are several types of life insurance available in India:

  • Term insurance
  • Term insurance with return of premium
  • Unit Linked Insurance Plans
  • Endowment plans
  • Moneyback policy
  • Whole life insurance
  • Group life insurance
  • Child Insurance Plans
  • Retirement Plans

Source:

[1] http://www.policyholder.gov.in/What_Life_Insurance_to_Buy.aspx

ARN:- Aug/Bg/18

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