Insurance companies often do extensive research on the market, the demographics, etc. to ensure that they make customized products that suit each prospect out there.
How do they do it? They create life insurance products based on what a prospect is likely to need.
There are broadly two types of life insurance policies: – Term plans that offer only death benefits and Endowment Plan or Unit Linked Plan that provide death benefits as well as a return on investment.
Imagine a person who is very clear that he wants to safeguard his family and loved ones if he is no more. To prepare for such unfortunate eventuality, he will opt for a “Term insurance plan”. The term insurance plan helps him to get a substantial life cover at a lesser and affordable premium. It is like a security deposit that he sets aside from his savings every year, just to ensure that his family can continue with their daily lives if he is no more. After doing a lot of research, we can apply for health Insurance policy online.
As with every financial product, the need to get more out of the investment is a norm, with most human beings. This is where an “Endowment policy” comes into the picture. Such a plan ensures that the policy holder’s family gets the sum assured in case he loses his life. If the policy holder is alive when the term ends, he receives maturity proceeds from the insurance company. He may also be entitled to a bonus amount on maturity of the policy.
However, there are many prospective insurance buyers who would want a regular inflow of returns. This is where “Cashback or Moneyback policy” comes in handy. Such a policy ensures that the policyholder receives specific returns on investment at pre-defined points of time during the life of the policy. A final sum is received as a maturity benefit.
And then, there are potential buyers of insurance policies who want their premium to not only cover their lives but also give them substantial returns on investment. They do not mind if part of their premium is invested in equity, mutual funds, etc. This is where Unit-Linked Insurance Plans (ULIPs) are useful. In such a policy, one part of the premium covers the life of the policyholder, and the other is invested in Equity, Mutual Funds, etc. and yields returns as per the performance of the financial markets during the active life of the policy.
There are also other life Insurance policies created specifically for needs such as safeguarding the life of your children in case of your abrupt death. Such policies are called “Child Plans”, and the money invested by the parent for premiums is used for the child’s future needs such as higher education, setting up his enterprise, buying a home, etc.
There are also “Pension Plans” which offer the dual benefit of covering the life of the policyholder and providing fixed pay out after he retires from active service.
Term life provides the most life cover at the least premium. All other plans which offer dual benefits also come with a higher premium. We recommend the user to opt for a very good term insurance so that his family gets the maximum benefit, in case anything unfortunate happens.