What Is Life Insurance Policy? Types of Life Insurance & Benefits | SBI Life
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What Is Life Insurance Types of Life Insurance

Insurance Basics & Financial Advice The gift of life is precious, and you cannot put a money tag on it. But one needs money for survival and to satisfy the needs of the family. If there is a sudden demise of the breadwinner, the family might face difficulties. Hence, to ensure the proper livelihood of the family even after the death of bread earner, it is often advised to buy a life insurance policy.

What Is Life Insurance Types of Life Insurance

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What Is Life Insurance Types of Life Insurance
What Is Life Insurance? Types of Life Insurance.

The gift of life is precious, and you cannot put a money tag on it. But one needs money for survival and to satisfy the needs of the family. If there is a sudden demise of the breadwinner, the family might face difficulties. Hence, to ensure the proper livelihood of the family even after the death of bread earner, it is often advised to buy a life insurance policy.

What is a life insurance policy?

Life insurance assures lump sum amount to be paid to the family if the policyholder passes away unexpectedly. Though money cannot make up the loss, it ensures no financial hiccups to the family even after the demise of the breadwinner.

The life insurance policy provides with the much-needed cover against risk and offers you opportunities to grow your savings It is also an effective tool that enables you to save for future expenses that may occur, such as the higher education or marriage of children.

Benefits of life insurance

Here are some of the benefits of life insurance:-

• Tax benefits:– Enrolling for a life insurance policy can guarantee you tax benefits

• Guarantee of fix returns:- Life insurance policies guarantee that you get a fixed amount after a fixed timeline. You need to go through the structure of different life insurance products.

• Risk mitigation and coverage:- These policies provide the quintessential risk coverage in terms of monetary compensations to mitigate and cover risks after the policyholder’s death.

• Provision for loan:- Certain policies provide the option of loan and allow to borrow a sum of money

• Health expense coverage:- Most of these policies cover the health and treatment expense that may occur.

Following are the different types of life insurance policies available today in the market:-

• Term Life Insurance

Term insurance policies provide the predefined amount of money to the policyholder’s family, only if the policyholder dies during a specified term. No claim if the insured person survives till the end of the policy period. This policy essentially remains active for a predefined time and is one of the affordable policies available in the market.

• Whole life insurance

Whole life insurance as the name suggests provides you cover at all points of your life in which the policy is in force. This coverage time can go as long as 100 years. These policies also offer loan facilities to the policyholder. The overall process of buying is simple and can be done online as well through a simple process.

• Money Back Policy

The main difference and advantage of money back policy is that it gives the policyholder different survival benefits which are linked to the period of the policy. Unlike other policies, this policy gives you money during the policy period. Regardless of the instalments paid, if the policyholder dies, the family gets the entire sum. These policies are expensive as compared to other counterparts.

• Endowment Policy

Endowment policies are different from term insurance policies in a way that in case of these policies, the insured gets a lump sum amount of money if s/he survives till the maturity date. The policy offers insurance with savings at the same time. They also come with riders that may be used to increase the coverage of the policy. In case of death, the endowment policy guarantees that along with the sum a participation profit is also paid according to the nature of the policy.

• Retirement Plans

Retirement plans, in simple terms, can be defined as those plans that guarantee fixed income after your retirement. They aid in creating a retirement corpus. This corpus is then invested to generate post-retirement money flow, thus creating a financial cushion and helping in risk mitigation. The money is rolled out in the form of monthly pension. All in all, these policies help the insurer in achieving the financial goals of long term nature.

In the advent of the internet, almost all the companies claim to have the best life insurance online. However, one must read the fine print carefully and should check carefully, if the policy offerings match with individual requirements.

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