Term insurance policy provides financial protection to the insured's family in case of his/her unfortunate demise.. ,the sum assured will be paid to the nominee ,No refund of premium or returns is applicable in this type of plan . Since everything that you pay goes towards covering the risk on your life, term insurance is the cheapest. There are no investments clubbed with a pure term insurance plan.
There is a variant of term insurance called term-insurance-with-return-of-premium wherein the premiums you pay are returned to you at the end of the policy term. The premium for such policies will obviously be more as compared to pure term plans.
Endowment plan is term plan plus add on offer of some returns on the premiums that we pay .If the Insured survive the policy term, then the sum assured plus the returns will be paid back on maturity date and in case of his/her unfortunate demise during the policy tenure, the nominee will get the sum assured plus returns as per the policy terms and conditions .
Without-profit endowment plans : These plans do not participate in the profits the insurance company makes each year. Apart from the sum assured, the insured shall possibly get a loyalty bonus, which is a one time payout made in appreciation of your sticking to the insurance company.
With-profit endowment plans : These plans share the profits the insurance company makes each year with the policyholder. So they offer more returns than without-profit endowment plans and are more expensive as well – that it, for all parameters considered same, the premiums will be higher than without-profit endowment plans.
Money-back plans are variants of endowment plans with one difference – Some portion of the sum assured is returned to the policy holder at periodic intervals through out the policy tenure. In case of death, the full sum assured is paid off irrespective of the payouts already made.
Bonus is also calculated on the full sum assured and not the balance money left. Because of these two reasons, premiums on money-back plans are higher than endowment plans.
Term plans, endowment plans and money back plans offer insurance cover till a specified age, generally 70 years. Whole-life plans provide cover throughout your life. Usually, the policyholder is given an option to pay premiums till a certain age or a specified period (called maturity age).
On reaching the maturity age, the policyholder has the option to continue the cover till death without paying any premium or encashing the sum assured and bonuses.
In all the above mentioned insurance-cum-investment products, you have no say on where your money is invested. To keep your money safe, most of these products will invest in debt funds. Unit-linked insurance plans give you greater control on where your premium can be invested.
The annual premium you pay can be invested in various types of funds that invest in debt and equity in a proportion that suits all types of investors. You can switch from one fund plan to another freely and you can also monitor the performance of your plan easily.
There are various charges to be aware of in a ULIP and is suitable for those who understand the stock market well.
Pension plans are investment options that let you set up an income stream in your post retirement years by giving away your savings to an insurance company who invests it on your behalf for a fee. The returns you get depends on a host of factors like total accumulated amount, the number of years when you want the money to come to you and at what age that starts.
The payment to Insured is called annuity starts immediately it is called an immediate annuity contract. However, if the payout start after some years of deferment, it is called a deferred annuity.
This plan is specially designed to meet the increasing educational and other needs of growing children. It provides the risk cover on the life of child not only during the policy term but also during the extended term (i.e. 7 years after the expiry of policy term). A number of Survival benefits are payable on surviving by the life assured to the end of the specified durations.
General Insurance
