Business Insurance

Life insurance is a resourceful tool that lets you and your dependents live life without any compromises in the unfortunate event of death or disability of the primary income holder. Though insurance can be used as an investment source too, the basic objective of a life insurance plan is to protect dependents of the insured in times of need.

There are many options available now for life insurance. But the story was quite different when insurance first came on to the scene. With initiatives from various life insurance companies, more options within life insurance like whole life insurance, term life insurance and many other payment options are available that simplify the whole process.

A number of life insurance plans are now available in the market:

• Term insurance plan – This type of life insurance provides coverage at a specified rate of payment for a limited period of time. Term life insurance is the original form of insurance as against the other types.

• Whole life insurance plan – A life insurance policy that remains active for the insureds entire life and requires premiums to be paid every year. There are a few types within the whole life insurance which are –

  • Non-participating: All values related to the policy (death benefits, cash surrender values, premiums) are usually determined at policy issue, for the life of the contract, and once issued usually cannot be changed.

  • Participating: Where the insurance company shares the extra profit with the policyholder.

  • Indeterminate premium: The distinguishing point of this type of whole life insurance policy is that the premium amount differs from time to time.

  • Economic: Part of the dividends of the insurance company is used to purchase additional term insurance, which yields higher death benefits.

  • Single premium: The pay period for this one is a single large payment up front. These policies typically have fees during early policy years if the policyholder decides to cash it.

• Endowment assurance life insurance product – It provides a fixed amount of money either on death during the period of contract or at the expiry of contract if life assured is alive.

• Money back assurance – It provides not just fixed amounts payable on certain dates during the insurance period, but also the full amount of money assured on death of the insured.

• An annuity life insurance product – With a series of pre-decided monthly payments on stipulated dates, this product makes sure that the insured gets a regular sum of money as long as he is alive.

ULIP or Unit Linked Insurance Policy – A ULIP is a life insurance policy which provides a combination of risk cover and investment. The dynamics of the capital market have a direct bearing on the performance of the ULIPs with the investor mostly bearing with the risks involved.