Types of life insurance policies in India: a comprehensive guide

Sponsored content

When choosing the right life insurance plan, you must ensure that it fulfils your requirements for a comfortable life. A life plan guarantees that your family will be looked after even in your absence and contributes towards building a substantial corpus for their future.

However, you must know the different types of life insurance plans in India to choose the most suitable one. Keep reading to learn everything you need to know. 

Types of Life Insurance Plans in India

Here are the different types of life insurance plans in India. You can choose based on your suitability and requirements:

• Term Insurance Plan

It is the most popular type of plan in India. A term insurance plan provides comprehensive coverage to your family when you pass away during the term period. It is the purest and simplest form of life insurance, where you pay a predetermined monthly or yearly rate called the premium to keep the policy active. If you’re wondering about your premiums, you can use an online term insurance calculator to determine the coverage you require and its cost in just a few minutes. 

• Whole Life Insurance Plan

As long as premiums are paid, whole life insurance offers coverage for your entire life and accumulates cash, too. Basically, a portion of the premiums paid goes into a cash value account, which earns interest. Keep in mind whole life insurance policies typically have fixed premiums.

• Unit Linked Insurance Plan

The unit-linked insurance plan (ULIP) combines insurance and investment. Under this life insurance policy, your family gets financial protection and options to grow their capital through systematic investments from market-linked returns. The policy allows you to invest in multiple fund options based on your risk tolerance to gain wealth.

• Endowment Insurance Plan

This type of life insurance policy offers saving components and death benefits. In case of your death, your family will receive the sum insured as a death benefit, whereas if the policy matures before your death, you will receive a lump sum. Moreover, you can choose the suitable mode to pay the premium and timeframe, like ULIP.

• Retirement Insurance Plan

As the name suggests, retirement insurance serves as a means to secure a steady source of income during retirement. With this plan, you can build a corpus to lead a life without financial difficulty after retirement. It allows you to generate significant wealth and supplement other income sources, such as pensions, savings, etc.

• Group Insurance Plan

A group insurance policy covers several individuals in a single plan. Unlike individual life insurance plans, a group insurance plan offers coverage for many individuals. This plan is ideal for employers, corporations, banks and other groups for their employees. 

• Child Insurance Plan

It is specifically designed to secure your child’s future financially. In this plan, you can build a corpus for your child for their marriage, education, etc., which they can avail as one-time payments or annual instalments after reaching 18 years. One of the crucial benefits of a child insurance plan is that it allows you to invest the premium you pay in debt, balanced and equity funds, according to your choice. 

• Money Back Policy

It offers a percentage of the sum assured at regular intervals as survival benefits. Once your policy reaches maturity, you will receive the remaining amount. Nevertheless, your family will receive the entire sum assured without deductions if you expire within the term period. 

How to Apply for Life Insurance Online?

Here is a step-by-step guide to buy life insurance in India:

Step 1: Open the official website of your preferred insurance company and create an account by entering your information.

Step 2: Choose the type of life insurance plan and coverage according to your preference.

Step 3: Answer a few questions to determine the premium rate and your eligibility.

Step 4: Pay the life insurance online via debit, credit, or UPI.

Step 5: You will receive the life insurance policy in your registered email address after payment. 

Please note that it is a generic process that may differ between insurance providers. 

Final Words

Knowing the different types of insurance plans in India can help you make an informed decision in choosing the correct one according to your requirements. In addition, you can customise the life insurance policy and coverage according to your specific requirements. You can also seek help from insurance experts, like ACKO, to choose the correct plan so your family does not face financial crunch in your absence. 

Disclaimer: the author(s) of the sponsored article(s) are solely responsible for any opinions expressed or offers made. These opinions do not necessarily reflect the official position of Daily News Hungary, and the editorial staff cannot be held responsible for their veracity.