Types of life insurance plans and their benefits

There are many things we tend to spend our money on, on an everyday basis. From our clothes, house, its décor, our food to even small things make us invest a good chunk of income in them. However, in the course of all these expenses, why do we tend to overlook the securities we need to build for our loved ones and ourselves? If you too have been doing the same, then here is a list of life insurance types, you can select from and take the first step of securing the lives of your loved ones.

  • Term insurance plan – if you have wondered what is term insurance, here we have the answer for you – these are plans, which are purchased for a fixed time. They do not yield any maturity benefit, and therefore, they are cheaper when compared to other insurance policies.

 

  • Endowment plans – explaining them in simple words, these are just normal life insurance plans with an extra benefit under which the person holding the policy gets a certain amount of the money if they survive till the date of maturity. Except for this, all the other details are similar to that of the term insurance plans.

 

  • Unit Linked Insurance Plan – these are plans, which allow the policyholder the freedom as well as options to raise an extra amount apart from the life security which all normal life insurances do. Here the paid premium is divided into two parts, one is for the primary life insurance, and the other is for raising money. Under this plan, the policyholder is also free to withdraw their amount of coverage partially.

 

  • Pension plans – in case of pension plans, the policyholder is supposed to deposit a particular amount of money for a specific time. After the mentioned age in the declaration papers, this money, which was deposited in the form of a premium, is discharged on fixed intervals in the form of an income to the policyholder.

 

Benefits of life insurance plans –

  • A reliable risk cover – in return to the premiums paid, these insurance plans deliver a risk cover to the family, which is insured under the policy, through monetary compensations.
  • Health expenses – life insurance policies also take care of costs, which might incur for medical purposes or hospital expenses.
  • Encourage savings – many life insurance policies require regular deposition of money. These insurance companies put the money in ventures, which are profitable in nature.
  • Tax benefits – most of these life insurances are tax-free under section 80 C of the income tax act, 1961.

 

These are some of the types and benefits of life insurance plans. There is a long – long list of many more types of these policies and the merits they carry with themselves to provide a safety cover to your life and the lives of your loved ones.

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