Types of Insurance Policy in India 2021 I best Life Insurance policies in India

 

The biggest pressure on any person once he starts earning is to invest. The method and idea of investment differs from person to person someone wants to invest in Mutual Fund and someone wants to invest in PPF. The biggest benefit of buying any life insurance is that it provides a financial support in case of any eventuality.

How Does Insurance work?

If a person buys insurance from any company he enters an agreement with company that he will pay a premium (monthly, quarterly or yearly) in return of a lump sum amount which the company will pay to the nominees in case of any eventuality.

 There are many types of Life Insurances policies in India and all of them are mentioned below:-

Term Plans: - In this type of Insurances Company agrees for pure risk cover in the case of eventuality. There is no maturity benefit and the sum assured is paid on demise of policy holder to the nominees if the policy is active.

ULIPs: - In this type of Insurances Company provide returns along with guaranteed sum. The sum is paid to the policy holder after the maturity but the return depends completely on the performance of the fund and there is no assured return in this type of Insurances.

Endowment Plans: - In this type of Insurance Company provide guaranteed return along with investment benefit after the maturity of schemes.

Money back Plans: - In this type of Insurance company provides lump sum return after the maturity along with some return during the term in which premium is paid. If the plan is of 21 years then company provides some return after regular interval before the maturity.

Whole Life Insurance Plans: - In this type of Insurance Company agrees to provide the maturity benefits while you reach the certain age generally 80 to 100 years and there is no investment benefit in this type of schemes.

Child Plans: - In this type of Insurance company agrees for 1 time payout and this type of plans are generally for child education or wedding and it helps to create a fund for future without taking bigger financial burden.

Retirement Plans: - In this type of Insurance Company agrees for 1 time payout or annual installments after the policy holder reaches 60 years of age.

Life Insurance safeguards the life of the nominees along with the policy holders. It also has tax benefits and acts as collateral for loans in case of emergency. There are many life Insurance plans out there and they have different criteria like entry age of policy holder, term of the policy and sum assured after the maturity of the plan. The best criteria to choose which insurances are good or not are to look its claim settlement ratio. The highest claim settlement ratio as per annual report of IRDAI for the year of 2019-2020 is of Max Life. It is better to consult a financial advisor before taking any Insurance.