what is life insurance?
types of life insurance plans and companies within India
- what is insurance (some basics)
- LIC India Plans
- SBI Life
- ICICI PRU Life
- Max life
- Postal insurance
- united India insurance UIIC
- List of insurance companies in India
Life Insurance Overview
Life Insurance is a contract between the two parties; the insurer and the insured where in terms are formulated by the insurer and agreed by the insured to cover financial risk of the life of the insured in the event of his death during a particular period of time. In many ways Life Insurance Plans are an investment to secure future against any kind of uncertainty that may be beyond one’s control. By opting for Life Insurance plans, the insured extends his family responsibility beyond his life and thus it is held of great relevance since its inception. Over a period of time, many other benefits of maturity and market linked investment, pension and retirement benefits have been included/ modified to bring Life Insurance for a wide range of individuals, groups and organizations. Life Insurance Corporation (a public sector life Insurance Company) is considered the leading Life Insurance Company in India.
Popular Life Insurance Schemes
Term Life Insurance
A basic Term Insurance Policy covers the benefit of life cover, payable only in the event of demise of the insured during the agreed term. This policy does not pay anything on maturity, if the insured survives the term. Term Life Insurance is the cheapest of all Life Insurance schemes and advised for masses.
Money Back Insurance Plans
Money Back Life Insurance Plan is devised to cover two fold benefits of saving and life cover.
- a) The policy promises to pay the Sum Assured on death of the insured during the term.
- b) It covers the survival benefits, payable to the insured surviving a particular interval (s) during the total term of the policy.
- c) Promises the maturity benefits in case of survival of the insured at the end of total term, along with bonuses as stipulated in the terms.
Whole Life Insurance Plans
Whole Life Insurance Plans promise the risk cover till 100 years, while the policy may be affected only for a particular term. The premium calculation is considered accordingly.
Unit Linked Life Insurance Plans
ULIPs or Unit Life Insurance Plans are devised to take care of the long-term investment needs in addition to life protection cover in event of demise. The insured has the authority to decide the type of Funds such as Equity Funds, Bond Funds etc and the proportion in which his premium must be invested. The benefit is paid towards the end of the term or earlier in case of death of the insured. ULIPs can further be Child Plans, Endowment Plans and Pension Plans, some of which come with special Rider Benefits to cover Accident and Disability benefits under one plan.
Pension plans are for retirement benefits. The pension plans are conventional annuity plans that agree to pay sum assured at the end of the term or annuity plus protection plans. Some companies are now offering unit linked pension plans that can be purchased online. For instance, SBI Pension Plans.
Child Plans cover the child of the insured as beneficiary of the benefits agreed upon. These plans are usually for education and settlement of children. Child Plans can be availed from traditional and Unit Life Insurance Plans.
Group Life Insurance Plans
Group Life Insurance Plans are the insurance schemes designed for group needs, such as Employees’ Insurance Plans or Corporate Retirement Solutions. Group Insurance Plans are similar to above individual insurance plans with inclusions made relevant for group. The premium and sum assured also differ. Group Micro Insurance Plans are also available at the nominal cost to help deprived sections of society who meet their needs through Micro Financing.
Life Insurance Riders
To make Life Insurance cover comprehensive, many products come with Riders that can be availed at additional cost. The common identified Riders are
- Critical illness Cover
- Accidental Death and/ or Accidental Disability Cover