When Mr. Mehta decided to get life insurance to protect himself and his family he had to be sure he was choosing the right policy. He had to buy a life insurance policy that caters to his needs, as well as his son’s education needs and his daughter's marriage expenses. He was clear about that. These decisions could not be taken lightly anymore. When he was faced with his own mortality it gave him the push he needed to save wisely and save for the future. His life insurance company helped him derive a formula that best suited his requirements and the requirements he has for his children. The various policies he could choose from are listed below:
Term Insurance
This type of policy is a contract between the insured and the life insurance company to pay the persons s/he has given entitlement to receive the money, in the case of his/her death, after a certain period of time. The policies can be taken for 5, 10, 15, 20 or 30 years.
Endowment
In an endowment policyan insurance policy by which a stated amount is paid to the insured after the period of time specified in the contract, or to the beneficiaries in case the insured dies within the time specified, periodic premiums are received by the insured person and a lump sum is received either on the death of the insured or once the policy period expires.
Money Back
This policy offers the payment of partial survival benefits (money back), as is determined in the insurance contract, while the insured is still alive. In case the insured dies during the period of the policy, the beneficiaryA person(s) designated by the policy owner to receive the proceeds of an insurance policy upon the death of the insured. gets the full sum insured without the deduction of the money back amount given so far.
Group Life Insurance
This is when a group of people have been named under a single Life insurance policy. It is popular for an employer or a company to add employees under the same policy. Each member of the group has a certificate as legal evidence of insurance.
Unit Linked Insurance
ULIPs (Unit Linked Insurance Plan) offer the insured the double benefit of protection from risk and investment opportunities. ULIPs are linked to the market where the insured’s money is invested to help earn additional monetary benefits.
Previous:
Why You Need Life Insurance
Next:
How Much Insurance Do You Need