Answer the following questions in short:
Write on different types of life insurance policies.
ANSWER:
The following are the various types of life insurance policies:
a. Whole life policy - Under this policy, the assured sum is paid to the beneficiaries only after the death of the insured.
b. Endowment life assurance policy - Under this policy, the assured sum is paid either at the time of the death of the insured or at the expiry of the contract, whichever comes first.
c. Term insurance policy - This policy is taken for a fixed period of time. The premium of this policy is fixed and is lower than any other life insurance policy. In case of untimely death, the amount is paid to the dependents of the deceased person, subject to the conditions of the policy.
d. Money-back policy - Under this policy, the insured is paid a fixed percentage of the insured amount during the life of the policy. In addition to this, full insurance amount is paid to the dependents in case of the death of the insured before maturity.
e. Joint life policy - This is a special type of policy that secures the life of two or more individuals against the payment of a fixed premium by those individuals or any one of them.
f. Annuity policy - This is a type of policy in which the insured is paid the amount due in monthly, quarterly or annual instalments after he or she reaches a certain age.
g. Pension plan policy - This policy does not offer any kind of life insurance to the insured. Instead, it assures a fixed amount to be paid to the insured either for a lifetime or for a fixed period.
h. Unit Linked Insurance Policy (ULIP) - This insurance policy combines the benefits of life insurance policies and mutual funds. A part of the amount invested in the policy is invested in equity shares, bonds or debt funds, while the remaining part is used for life insurance.
