What Type of Life Insurance Policy Should You Buy? - Make Money Online

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What Type of Life Insurance Policy Should You Buy?

Investing in a life insurance cover is an important financial decision. It helps your loved ones meet their financial needs even when you are not around. The benefit amount obtained may be used to live a comfortable life and carry on their lifestyle without any financial constraints. A life insurance plan, therefore, provides financial security to your family.

There are numerous types of life insurance plans available in the market. Following are the five most common types of life insurance policies available in the market.
  1. Term plans-Term plans offer coverage for a certain term. In case of an unfortunate death during the policy period, the beneficiary is entitled to receive the sum assured amount. It is important to note that such a plan is a pure life cover policy and hence is a great tool for life cover.
  2. Whole life insurance-A whole life insurance policy offers coverage until you are alive or up to the maximum limit age of 100. The policy remains in force as long as the premiums are paid or up to the maturity date. A unique feature of a whole life insurance cover is that you may withdraw a part of the amount as and when you need it.
  3. Unit Linked Insurance Plan-A UnitLinked Insurance Plan (ULIP) is a type oflife insurance policy that provides the benefit of life cover as well as investment. A part of the premium amount is used to provide coverage, while the rest is used to invest in qualified investments such as bonds, mutual funds or stocks. You may opt for such a type of life insurance product to meet both your long-term and short-term goals.
  4. Child plan-As the name suggests, such a policy offers life insurance coverage to a minor until the minor becomes an adult. Such a policy offers financial protection in case of an early or unexpected death of a child. Investing in this plan at an early age indicates that there is financial planning involved for a larger number of years. Hence, a child insurance plan is an excellent tool when planning.
  5. Retirement plan-Your golden years are supposed to be the best years of life. It is during this time that you reap the rewards of years of hard work. In order to live a worry-free retired life, it is necessary to begin investing for the same at the earliest. For this purpose, you may consider purchasing a retirement policy, also known as a pension plan. Such a plan provides the much-needed financial support during your golden years.
With numerous life insurance options available in the market, selecting the best one may often become a cumbersome task. You may analyze the features and benefits of all the types of life insurance plansand make a choice best suited to your needs.
What Type of Life Insurance Policy Should You Buy? What Type of Life Insurance Policy Should You Buy? Reviewed by Dhanur Chauhan on 12:34 AM Rating: 5