Life insurance is a protection plan where the policyholder's family gets the financial protection in case of the policyholder's unfortunate death. So its an important financial plan that keeps your family protected even when you are not around. There are different kinds of life insurance plans in which you can invest. Let's take a look on them.
Whole Life insurance Plan.
As the name suggests, you get the cover for your life as long as you survive. In case of the death of the policyholder, the sum assured will be paid to the nominee. Whole life endowment plans are same with some modifications like providing maturity benefit.
In this plan, you invest for a specific number of years at a fixed premium rate. It does not have any other investment component. If the investor expires, a lump sum insurance amount is paid to the survivor.
Money Back Plan.
In money back life insurance plan the policyholder gets a percentage of the sum assured at regular intervals instead of getting the whole amount as lump sum. In the event of unfortunate death of the policyholder during the policy, the nominee gets the entire sum assured. There is no deduction of survival benefit that has already been paid back to the policyholder.
Endowment plans are plans that pay the lump sum amount of sum assured either on maturity or on death of the policyholder. Here, the policyholder gets the opportunity to encash and receives the surrender value determined by the insurance company.
Retirement plans are designed such that the policyholder builds a corpus that can act as regular source of income after retirement. So after retirement, this plan helps the policyholder to maintain his lifestyle as he used to do when he was employed.
ULIPS are Unit Linked Insurance Plans. These plans are associated with the risks in the capital market. If you are risk lover, then you can invest in such insurance plans. They provide tax benefits as well as insurance benefits.