Term life insurance is the least expensive and simplest kind of life policy. It is usually referred to as pure life policy protection as it has no cash value. The core purpose of term life insurance is to offer the insured’s beneficiaries with financial security in a reasonable manner. This means that this kind of policy has only one main feature and this is to pay a particular lump sum to a beneficiary upon a specific event, such as your death.
The premiums for term life insurance plans are economical when compared to other kinds of insurance policies. With this type of insurance, the cover exists for a predetermined term and will then result in a huge sum being paid when the insured dies. If, however, the insured is still living when the term terminates, then no payment will be made to the beneficiaries. It is important to keep in mind that term life has no cash value and you need to make sure that this sort of insurance is the correct life policy for you while planning for your family’s financial independence.
The main types of insurance plans are:
- Term insurance – this type of insurance plan is the most basic and simplest plans. These plans offer a cover for risks only for a short time period. After the terms come to an end, you can renew the plan, but your premium might rise high. These plans are economical.
- Whole life insurance – expensive, but these policies continue for as long as the insured lives. Also treated as investment options as one does not receive any money till the death of the insured.
- Retirement plan – these plans are also available for senior citizens. These insurance policies are extremely essential for such people as these plans provide freedom and security for the surviving spouse. Child plans are another choice on these plans. These policies offer financial aid to your child’s education, marriage ets.
- Money Back Plan- This plan offers returns periodically along with an insurance cover, thus, giving dual benefits.
- ULIP- This is a perfect blend of investment and insurance, giving the best of both.
- Child Plan-These policies are perfect for securing the future of a child so that there is no financial stress in case something happens to the primary care giver.
- Endowment Plan- These plans combine insurance with savings.
These plans protect the requirements and needs of your loved ones in case of unfortunate events. It helps in keeping your family safe and secure even when you are not around.
Endowment and Term Plans
An endowment policy is a life assurance agreement proposed to offer a lump sum after a specific term or an earlier death. Endowments can be cashed in early – called as surrendered and will then be paid to the value which is decided by the company depending on how long the policy has been running and the amount has been paid into it.
- An endowment policy is a mix of insurance and investment – the life of the individual opting the policy is insured for a definite sum. This over is called to as the sum assured. A definite part of the premium gets billed towards this SA. A quantity of a portion of the premium is issued towards the administrative operating cost of the company selling the policy.
- Announces a bonus every year – the money that is invested produce a definite return every year. This return might be stated as a bonus. The bonus is usually generated as a definite proportion of SA or life cover as it is commonly recognized.
- The bonus declared is not to be paid right away – like is the case with a mutual fund dividend or a stock dividend which is to be cleared without delay after it is declared, the bonus stated build up and is to be paid only when the policy matures or if the holder dies.
ULIP In Life Insurance
ULIP – Unit-linked life insurance plan offers great investment options along with financial security. Usually, there will be two premiums to be paid – one for the life insurance and one for the investment. These plans are advantageous as the offer financial solutions during your lifetime as well as after your lifetime to your family members.
There are various types of life insurance plans available which can be chosen from Coverfox.com. Each has a different benefit and thus, one should analsye and figure out their requirement and then choose a policy accordingly. If there is any doubt, one can always take help from someone who can give the right advise.