Life insurance has always been considered an essential financial tool. However, not many people know that there are several types of life insurance products. Each of these can be helpful in their own unique ways. While some provide protection to the chief earning member’s family, others can be seen as an investment or retirement tool.
Here are the different types of life insurance plans and their features and benefits, so you can pick the most suitable one
types of life insurance policies pdf
Term insurance protects your family’s financial future if something were to happen to you. Designed as a simple and affordable way to give financial cover, a term plan is a vital part of financial planning for the primary wage earner in a family.
Term insurance is a pure protection plan and is not market-linked. Moreover, the premiums for term insurance are lower as compared to any other life insurance product. The premiums are also more affordable if you buy them early in life. Experts often suggest that term plan should be a priority for you as soon as you start earning.
Term insurance can be used for various purposes. In the absence of an income, your family can use the cover from the insurance to pay for their day to expenditure, education costs, or wedding expenses. If you have any outstanding debts, such as home loan, car loan, etc., your family can pay them off with the cover.
Some term plans also give you the option to add riders, like critical illness^ coverage (providing a lump sum for the treatment of specified critical ailments) and accidental death benefit+ (paid over and above the sum assured in the unfortunate event of death due to an accident). These riders can provide you and your family with an extra layer of protection at a nominal increase in the premium.
Types of life insurance policies pdf
Term life insurance is the most popular type of life insurance. It is widely considered to be the simplest and purest form of life insurance. It offers a death benefit to the beneficiaries of the policy if the policyholder passes away during the policy term.
Term insurance is the most affordable types of life insurance. The most distinctive feature of this plan is the high amount of coverage offered at extremely nominal premium rates. It is thus cheaper than other types of life insurance policies.