Types of Life Insurance
Types of Life Insurance
a) Endowment life insurance: This policy is for a fixed amount and specified period. The main purpose of this policy is to make long term saving. The insurance should go on paying fixed premium for a certain period such as 5 years, 10 years, 15 years or twenty years. If the insured dies before the specified period the amount for the premium should be paid to his/her nominee or his dependent. If the policyholder survives for the period of the policy, he is paid the specified amount of the policy, with bonus. Now a days endowment policy is become more popular.
b) Whole Life Insurance: This policy continues throughout the whole life of the insured. The period of the policy is indefinite. The main aim of this scheme is to make immune from the finical load that may occur to the dependent person after the death of capable to earn. The policy money is payable after the death of the insured and payment is made to the dependents of the insured person. The amount of premium is comparatively lesser in this policy. This types of policy has no financial gain to insured. Thus, This types of policy is not so much popular.
c) Children's Education and Marriage Endowment life Insurance: In order to met the expenses of the education and marriage of children, this policy is taken by the parents. This policy is also for a fixed amount and specified period. No premium is paid if the parents die before the maturity period, the child does not need to pay the amount for premium but the insured amount and the dividend is paid to the child only after the end of the period. If the child dies before the maturity, the policy is paid up.
d) Term Life Insurance: This is a specific and short period life insurance policy ranging from 3 months to 5 years. Insurance taken for a certain period of time to fulfill certain objective is called Term Life Insurance policy, the sum insured is payable to the nominee by the company only after the death of the insured or a policyholder. But if he survives till the maturity, the company will not be liable to pay the sum insured. Thus, it is neither a saving nor an investment. This policy is good for those who want a short risk covering e.g person going aboard or army personnel going to the war etc.
e) Anticipated Endowment Life Insurance: Under this policy, a part of sum assured is paid at certain intervals before the maturity period and balance amount is paid tat the maturity period. The insured dies before the maturity date, the full sum assured is payable without any deduction of installment paid earlier. In this scheme, the time period is fixed for 10 years, 15 years, 20 years, or 25 years. Suppose, if the period fixed for 15 years, 25% again, 25% of total insured amount in paid as a second installment and rest 50% and the dividend is paid after the fixed period is over, Similarly, if the time period is fixed for 20 years, the insurance company promises to pay 25% of insured amount after 10 years 25% after 15 years and remaining 50% after the completion of the specified period. For 25 years' policy, they will pay 10% after 10 years, 15% after 15 years, 25% after 20 years and rest 50% after 25 years.
