TYPES OF LIFE INSURANCE POLICIES

TYPES OF LIFE INSURANCE POLICIES

That they take finance in this video, we would be covering the topic types of life insurance policies. We would be looking after money back plan term plan whole like plan, your lips and endowment plan. So this video is necessary because you know, insurance is necessary to cover the risk and losses that happen due to due to any uncertainty. And when we are talking about life insurance, there’s this becomes more crucial. Because on your life, there are your dependence and the financial problem that can occur. In absence of you can be covered easily by taking life insurance policy at very low premium. So before you are going to purchase any life insurance, you must be having proper knowledge about each of the plan available so that you can discuss with your insurance, agent with your insurance company. And you can tell your requirement and you can know that you are not being misleaded and you are buying the perfect policy for your requirement. So let’s see and understand what exactly life insurance is and life. Insurance can be defined as a contract between the insurance company and the policy holder. So, yeah, exactly. It is a contract because the insurance company is guided by the law to pay you under the turns and policies covered in case any

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uncertain event occurs where you, where you lose your life or you are dead or on upon the benefit or upon the maturity, the benefit has to be provided. So here, the insurer provides coverage that is the sum of money to the insured. In short means the policy holder. Insurer is the insurance company who would be providing the coverage and in exchange for a premium. So you would be paying the premium as a policy holder as the insured you would be paying the premium after a set maturity period or upon the dead. So yeah. According to the terms and conditions of the policy, the insurance company would be obliged to you. The coverage amount that is the sum of money upon the maturity period or upon your death as further the terms and conditions of life insurance policy, which you will be taking. Now, we would be looking after various life insurance policies. The first will be term plan than endowment plan money, back plan, you live, and pension plans. So, one by one, we will be reading about. We would be learning about each of these and and try to understand the basic difference and so that you can match your requirements with the kind of policy you want for your life coverage. So first is Tom plan, now term insurance is a pure risk cover product. It pays a benefit only, if the policy holder dies during the period for which one is ensured. So, it is a pure risk or pure ensurance product because insurance product is not meant to provide you any benefit. It is meant to cover you against any kind of risk or loss so term. Ensurance that. Basic purpose if you if you die it would be providing you the benefit. If not you want to be provided with any kind of benefit. This is the basis of term plan which is apparent insurance product. It will provide you benefit only if you die because it is a life insurance product. And and if you are not any, if your, if you didn’t die, you won’t be provided with any benefit. Even after the majority. So term, life insurance provide life, insurance coverage, forests specified term of years for a specified premium. So this is a cold as term, life term life plan because it is for a specified period of

LIFE INSURANCE

time. For example, from five years to 30 years, it can be raised depending upon the policy. You are taking the insurance company which is providing you. So it depends on the number of years, for which you are taking the Tom plan and you would be paying specified premium, which is a very small amount. So, in terms, you can turn plan, you can get about to an estimated one cover of coverage amount, only by about 500 rupees of premium per year. So this is the small amount of premium, which you are paying to get a huge coverage amount. So, it would be beneficial if you to cover any kind of uncertainty related to your life risk. Common insurance premiums are generally low because it only covers the risk of death and provides no return. So as I said, so for example, term plan you have taken was for 10 years in that 10 years of time, you did not die. So you want to be provided with any kind of benefit, any kind of coverage, you won’t be returned with your premium, which you have already paid, but if you die in between that in the win between that period, you would be provided the whole coverage amount which would be a very huge amount as compared to the premiums, you have paid. So it is a pure insurance product to cover the life risk. If policyholder, or ensured dies before that specified term is over, he’s beneficiaries receive a payout. And if he survives the term, there is no majority benefits. So as I already mentioned, only, if you dive within that term period, you would be provided with the benefit or the, or the coverage amount. But if you have survived there would be no maturity benefit. Second is endowment plan now and dominant insurance policy provides insurance coverage along with saving feature. So here you are a this is a kind of product where you are putting up your money to save also. So it’s just not an insurance risk. Cover it, providing you a saving option as well. Some shorted, any accrued bonus is paid out at maturity of the plan or if that occurs during the term of policy. So, if during the term of policy, your death is occurring, you would be provided your beneficiary. I mean, would be provided, with the whole, some, a short and any kind of accrued bonus of the company is declared. If the company has declared, it is going to pay out to the policy holders that would be provided at maturity of the plan, even at the majority of plants. So for example, you have taken an endowment plan for 10 years. So on maturity after 10 years you would be provided with the coverage amount whole as well as any accrued bonus. And if you die before in between that term period, then also you would be provided the whole coverage amount and the bonus amount. So as we see in the term plan, you would you were provided with the benefit only if you died. But here, if you, even if your death death doesn’t occur, you are provided with the coverage as well as bonus amount on maturity. So it is an endowment plan, which is also referred at saving plan, but the only thing to keep in mind here is that because it is providing your kind of saving option. Also, the premium rates will be higher as compared to the term plan and maybe the coverage will be lower as compared to the term plan which it was providing at the lower premium. So see this is our next point. Premiums are generally higher as compared to the term plants and guaranteed some with a short bonus is provided on maturity. So it makes logic that because you are being provided with guaranteed coverage as well as bonus amount or maturity, you would have to pay premiums which are higher as compared to the term plan. The maturity period of policy, may range from 5 to 30 years again, as we discussed in term plan. Also endowment plan also provides you with variations in the term period

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which you can choose for. So it ranges between 5 to 30 years, our next is money back plan. So money back, insurance policies, are type of insurance policies. That provides life coverage and also assured, they return of a certain person of the summer short, as cash payment at regular intervals. So if you are looking for an insurance product which can provide you regular cash inflows also, so that is money. In fact, plan here, you can get a short sum as cash payment at the at regular period of time. So maybe in three months, in six months, as per you have chosen the plan. As for the time period you have chosen you can get the cash payments. Now, this is why money back plan is becoming popular in these time because this policy is not just covering your life. It is also providing you a regular income source. Now, regular payouts, made in money. Back plan are also referred at survival benefits. This is also referred at survival benefits, because you are provided with this regular payout and you have survived till this term period. So you, you have you, you have not died. You have survived and that’s why it is called its survival. Benefit payout the rate of return. On this policy is quite low. Obviously insurance products are not meant to provide you any investment options, so the rate of return, which would be provided in any kind of insurance product, would be very minimal, very low. So, you must treat that as a risk coverage option as a saving option and not as an investment option, as a necessity, rather than any wealth creation option. If then, short dies during the term of policy full. Some assured is paid out irrespective of survival benefits already paid. So here, what is happening that you are being provided with regular cash flows at regular intervals? Now, what happened if you die in between your term period before the majority. So in that case, you would be provided with the full coverage amount. So you don’t have to worry that you have already been provided with the regular cash flow. So that about would be deducted and you would be not provided enough coverage amount on your debt, to your family members, to your dependents, to your beneficiaries. No, it’s not that upon your death, you would be provided with the full show. A short according to the policy and and irrespective of the survival benefits that has already been paid to you accrued bonuses are paid on maturity or death as in the case. So here also, if there is any bonus declared by the company, as for the policy. So that would be paid on maturity or upon death as in the case related to the policyholder. Let’s look after unit length insurance plan, which is popularly, referred, as you lip plan. So eulip is an insurance plan that combines insurance protection with investment option here. This product was introduced to combine the future of both insurance, as well as investment option. So, many people who are afraid of investing in stock markets and all this product came to be useful because it was providing you with an with an investment option, along with your insurance and building up the trust. So it enables the policy holder to earn market, link returns by investing a portion of the premium money in various proportion in the equity at that markets. So, here the premiums which you are paying because you have taken this, you live policy, those premium, the proportion, the proportion to some amount of that premium would be invested in the equity and dead market.

ENDOWMENT PLAN 

 according to the market, fluctuation, according to the Market, you are the return would be dependent. Your the return from your insurance policy would be dependent because that would be linked to the market. Some proportion of your money would be invested in that. So it is providing you coverage by by keeping aside your proportion of money and investing some of the proportion of money in the market. So it is providing you with the both option, the insurance coverage as well as the investment option. The unit provides both death, and maturity benefits to the holder at the time of majority of the plan, the policy holder will receive the value of the fund as on the date. Since your lips are linked to the market, the proportion is invested in the market. The value, which the policy holder will be receiving would be the fund value as on the date and the fund value will keep on fluctuating. So generally Euless, provide good returns as compared to

MONEY BACK PLAN

other insurance product, because other insurance products are made to provide you coverage amount are saving option, but didn’t make med was, but wasn’t designed to provide you any investment return. So here, you live provide, you a good return about 10 to 12%, depending, on the market condition. And the only demerit is that people does not accept Euless because it is not pure insurance. So the coverage amount would be very less, the coverage would should, which should be provided to cover. That risk would be very less. However, the one would provide it to, you would be good and it would be serving as an investment investment option in the event. A policy holder dies during the term of policy, the beneficiary will receive either the some assured, or the fund value or both depending on the terms of policy. So, this would depend on the term and condition of the policy, what you will be receiving. So before you are going to take any eulip plan, you need to discuss all these things. You need to go through the terms and conditions to understand what returns you can get and how this would help in your risk coverage how this will help in getting the returns if you want any. Now, basically it is recommended that you should not purchase any insurance plan as an investment option because insurance is majorly to cover the risk in case of any uncertain event. So, if you’re taking life insurance, you should look for high coverage amount, which would be a good enough to solve your family, to solve your dependence with low premium, and you should not go for return or return etc. So, whenever you are taking an insurance policy, just see that if you are getting good coverage to solve your family, if you have to pay lower premiums, all these options are good and you should not focus on getting returns whereas it’s your choice. You can always compare and choose as per your preference. Any of these plan, pension plan. What I’m in. Plans are pension, plans are normally insurance plans to which contributions are made till retirement or for a specified, period targeting retirement. So these are

PERSONAL LOAN 

plants, are those insurance plans which are generally targeted towards your retirement to serve your retirement, so that you can get fixed cash flows. After you retire as admittees on pension products, are required to have defined a short benefit in the form of guaranteed return on the premium space. So here you will be getting again, a short and guaranteed return on the premiums, you have been paying one third of the corpus accumulated can be withdrawn as lumpsium. The remaining can be used to buy any that will make monthly payments to the holder after retirement. So you are allowed to use one third of the corpus accumulated. So how whatever premium you have, paid one third of that corpus along with interest can be withdrawn as lump sum and in remaining you can use that to buy any you should do prefer that because after your retired retirement, it will serve as a constant cash flow to a serve your life, to serve your life expenses. So it’s good to take pension plan which can help you out in your, in solving, your retirement needs. Thank you for watching. This was all for this video do like and share my videos. Subscribe to my channel. They take finance. Thank you. All.


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