In market there are different types of Life
insurance policies are available for the different requirements of the peoples.
A few popular are described below for all just to have an idea and choose
whichever suits your requirement.
TERM POLICY
Term Life Insurance Policy
is as its name suggests is taken for a specific term or a period of time and if
the insurer dies during this period the nominee will get the sum assured. This policy is although a low premium policy
and does not pay any amount on survival of insurer. This policy is beneficial
for the people who cannot afford a heavy amount on premiums. It is purely an
insurance scheme and does not have investment features like others policies.
Yearly Renewable Term Insurance:
This policy is issued for a period of one year and
the insurer settles the claim if insured dies during this period. This policy
can be taken for up to a certain age such as 65 years etc.
Level Term Life Insurance: The premium paid under
this type of policy remains constant for the whole period. The longer the
period, the higher is the premium. Because it cover the insured till older age
where chances of deaths are higher. This policy can be renewed only on the
discretion of insurer, subject to good health of insured.
Decreasing Term Life
Insurance:
Under this type of policy the benefits starts decreasing every year whereas,
the annual premium is constant. For eg. the
benefits to the insured will be lesser if death took place in proceeding years,
in comparing to starting period.
Increasing Term Life
Insurance:
The benefit also goes up along with the premium every year. Term insurance
is helpful to those who do not have more money in initial years.
WHOLE LIFE INSURANCE
The payment under the policy is assured and this
policy does not have an end date. The assured can insure himself or herself for
higher amounts (at comparatively low premiums) so that his dependents are well
provided for in the event of his or her death. This type of policy requires
premium payment to be made indefinitely and the policy holder may find it
difficult to continue the premium payment during his old age. This type of
policy is ideally suited to take care of estate duty liability. Duties or
property tax is payable on the death of the assured by the legal heirs for
transfer of property in their name. This duty at times can be very steep. The
proceeds of the policy is useful for paying up these taxes.
Types of Whole Life
Insurance
Single Premium: The premium under this policy is paid only once at the time of
inception of policy calculated as per the sum assured.
Continuous Premium: The insured continues to pay the same premium as
long as he or she lives at the same duration as decided upon at the time of
inception of policy. The premium is calculated taking into account the probability
of insured’s death and compound interest.
Modified Whole
Life Insurance: The premium
paying option under this type of policy is flexible for the ease of insured.
Generally, insured asked to pay low level of premium in the initial years and
much higher amount in the later years as the earning capacity of the insured
goes up.
ENDOWMENT LIFE POLICY
In this policy the insurer agrees to pay the assured or his nominees a
specified sum of money on his death or on the maturity of the policy whichever
is earlier. Premium
is naturally a little higher in the case of this policy than the whole life
policy. This is a very popular policy these days as it serves the dual purpose
of family and ole age pension. The premium is payable till the maturity of the policy or until the
death of the assured whichever is earlier.
Double endowment policy
The insurer agrees to pay to the
assured double the amount of the insured sum if he lives on beyond the date of
maturity of the policy. This policy is suitable for persons with physical
disability who are otherwise not acceptable for other classes of assurance at
the normal tabular rates. Premiums are to be paid for a selected term of years
or until death, if earlier.
JOINT LIFE POLICY
CHILDREN’S POLICIES
Fixed Term endowment (Marriage): This
policy is purchased by the parent and guardian for the purpose of marriage of
their ward, they are regarded as the assured. A particular time is selected and
the sum is paid to assured on expiry of term.
Premium is paid till the maturity of term or on the death of the
assured. The sum assured is paid in lump sum at the end of term or on the death
of assured whichever occur first. The logic behind this policy is to generate a
lump sum for a major occasion like marriage.
Educational Annuity
Assurance:
This policy is similar to fixed term endowment (marriage) the difference is
that the sum assured is paid in half yearly installments for 5 years, which is
ideal to pay semester fees for higher education. These policies are taken
forecasting the futuristic expenditure.
MONEY
BACK POLICY
Money back policy is working on the same platform
like endowment plans work. The unique feature of this type of policy is certain
share of sum assured is paid to the insured at a certain interval. At the end of policy term the remaining
amount plus bonus occurred thereon is paid to the insured. If insured is died
in between the term period the sum assured is paid fully and no premium is
required to pay thereafter. 
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