Types Of Life Insurance | Credit Help India


The insurance industry is one of India's fastest-growing industries, with policyholders forecast to increase by more than 4% in the coming years. While initially controlled by the government, India permitted private companies to solicit insurance policies in 2000, broadening the insurance sector's horizons.

Life, as we all know, is unpredictable, so it's important to have knowledge about life insurance policies in order to protect our families financially.


Life insurance is a contract between an insurance provider and a policyholder in which the company pays a cash settlement to the policyholder's family in the event of the latter's death, sickness, or property harm. The insurer must compensate the nominee or policyholder the entire amount covered by the policy, and the insured must pay a prescribed premium amount according to the terms for the duration of the policy. Life insurance provides full financial security to the policyholder's family.


Life insurance companies sell a variety of plans, each with its own set of features, incentives, and, most importantly, terms and conditions tailored to the needs of their clients.

Term Insurance Plan: This is the cheapest life insurance policy available, and it is solely a risk-coverage policy. The insurance is only valid for a certain period of time, as the name implies. The beneficiaries receive the amount assured under the agreement if the policyholder dies during the policy period. If the insured lives until the end of the term plan's term, there is no payout. The policy buyer, on the other hand, has the option of terminating or extending the policy.

Endowment policy: This insurance policy differs from a term policy in just one way: it pays out the amount guaranteed at the maturity date, regardless of whether the insured lives until the end of the term. Under this scheme, the charges and premiums will be higher.

Whole life insurance policy: This life insurance policy, as the name implies, protects the policyholder for the rest of his or her life. The premium will be charged until the insured's death, although there is no set insurance duration. After the policyholder's death, the matured sum is credited to the beneficiaries. This package also provides tax incentives to the insured.

Money back policy: This is analogous to a policy of endowment. Over the course of the plan's duration, a portion of the amount insured is paid out to the policyholder. After the policyholder has completed the tenure, he or she receives the whole sum that has matured. The beneficiaries receive the amount promised if the insured dies before the term expires.

Unit linked insurance plans: It is a comprehensive package that includes both insurance and investment components. This scheme, like an endowment plan, allows a person to receive the amount guaranteed at the maturity date. The policyholder may invest a portion of the insurance proceeds in stocks, mutual funds, or bonds under this arrangement. It provides insurance cover as well as investment opportunities to policyholders.

Children’s policies: This form of insurance is purchased solely for the benefit of children. It will assist parents in saving money for their children's higher education and other needs.


The sole aim of an insurance policy is to provide financial security to your family members while you are away. To make things work better for you, select policies that provide the most support to your loved ones after you pass away.

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