What is Life Insurance and how many types are there?Life Insurance (जीवन बीमा) क्या है और कितने प्रकार के होते हैं ?

 

If insurance, which we also know as "life insurance" and this insurance can be of many types. But all have the same purpose. There are different schemes for all different things. Such as - life insurance, health insurance, animal insurance, vehicle insurance, or other types of insurance etc.

Life insurance is financial protection against contingencies related to human life like death, disability, accident, retirement etc.

Human life is subject to the threat of death and disability due to natural and accident. When human life ends or a person becomes disabled permanently or temporarily, there is loss of income for the family.

What is Life Insurance?

Life insurance or life insurance is a written agreement between a person (insured) and an insurance company, according to which the company promises to pay a predetermined amount to his beneficiary on the death of the person.

Instead, the person has to pay a regular premium. The amount may be paid due to other events, such as critical illness or disability. There is also an option of investment in many life insurance policies.

Although the value of human life cannot be worked out, an economic sum can be determined based on the loss of income in the coming years.

Therefore, in life insurance, the sum assured or the guaranteed amount is the way of 'profit' to pay in case of loss. Life insurance plans provide a fixed sum of money in the event of death or disability due to accident during the term of the policy.

Very few people take life insurance in India. The Annual Report of the Insurance Regulatory and Development Authority (IRDAI) states that only 3.69% people in India had life insurance in 2018.

This number is very less compared to developed countries. Life insurance penetration in India stood at 2.7% from 2015 to 2017. The reason for this is the lack of awareness among the Indian consumer.

The aim of this campaign is to make more and more people aware of insurance, and get it insured. This campaign is being run in all the main languages ​​of India like Tamil, Telugu, Bangla, Malayalam and Kannada.

Efforts are being made to reach out to the countrymen through all the mediums of advertisement, media coverage, on-ground activation, digital and social media. Through this campaign, the Life Insurance Organization wants to give insurance the place it deserves in the minds of Indians.

Basic principles of life insurance contract

    insurable interest

    supreme good faith

    Life insurance covenant is not a covenant of indemnity, it is not possible to indemnify the loss of life.

How many types of Life Insurance are there?

Life insurance is useful for you as well as your family. If the sole breadwinner of the family is the head, then after his departure, life insurance can provide some financial relief to the people dependent on him.

Life insurance is not just one type. Some policies give you cover as well as the option to get returns through investments. You can choose from 7 types of life insurance policies depending on your need.

1. Term Insurance Plan

This plan can be purchased for a fixed period of time; Like 10, 20 or 30 years. Under this plan, you get coverage for a tenure as chosen by you. There is no maturity benefit in such a life insurance policy.

They provide life cover without the savings/profit component. Hence, they are cheaper as compared to other policies. In term insurance, on the death of the policy holder during the policy term, the Sum Assured under the policy is paid to the beneficiary.

2. Endowment Policy

This type of life insurance policy consists of both insurance and investment. This policy has a risk cover for a specified period and at the end of that term the sum assured along with bonus is returned to the policyholder.

Under the endowment policy, the face value of the policy amount is paid on the death of the policyholder or after the specified number of years. Some policies also pay in case of critical illness.

3. Moneyback Insurance Policy

This policy is only a kind of endowment policy, in this policy also there is a combination of investment and insurance. The difference is that in this life insurance policy the sum assured along with the bonus is returned in installments during the policy term itself.

The last installment is available at the end of the policy. If the policyholder dies during the policy term then the entire Sum Assured gets to the beneficiary. However, this policy has the highest premium.

4. Lifelong Life Insurance

In Lifelong Life Insurance ie Whole Life Insurance Plan, you get protection for life. That is, the policy has no term. On the death of the policyholder, the nominee gets the claim of insurance. Other life insurance policies have a maximum age limit, which is usually 65-70 years.

After that, the nominee cannot take the death claim in case of death. But under life life insurance, the nominee can claim even if the policyholder has died at the age of 95 years. The premium of this policy is very high.

Under this policy, the policyholder has the option to partially withdraw the sum assured. Apart from this, he can also take money in the form of loan against the policy.

5. ULIPs

Both protection and investment remain in this plan. The returns you get in traditional endowment insurance policies and moneyback policies are assured to an extent, whereas there is no guarantee of returns in ULIPs.

This is because in ULIPs, part of the investment is invested in bonds and stocks and you get units like mutual funds. In this case, the returns are based on the volatility of the market.

However, you can decide how much of your money should be invested in stocks and how much money should be invested in bonds.

6. Retirement Plan

Life insurance cover is not available in this plan, it is a retirement solution plan. Under this, you can create a 'retirement fund' by assessing your risk.

After a specified period, you or the beneficiary after you will be paid a certain amount as pension. This payment can be on monthly, half yearly or yearly basis.

7. Child Insurance Policy

These plans have been designed keeping in view the education expenses and other needs of the children. In a child plan, a lump sum amount is paid after the death of the policyholder but the policy does not lapse.

All future premiums are waived off and the insurance company continues to invest on behalf of the policyholder. The child gets money for a certain period.

Importance Of Life Insurance

    protection from premature death

    saving for old age

    Savings are encouraged.

    investment initiative

    Credit – Loan can be obtained against the security of life insurance policy.

    social Security

    risk transfer