Five types of life insurance policies and which one suits you best

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Five types of Life Insurance Policies and which one suits you best:

Five types of Life Insurance Policies and which one suits you best


Life insurance is the first and foremost investment one should make once they start earning. Life insurance policies act as a security for your future and is a great savings tool as well. The need and importance of life insurance for everyone is undeniable. In order for a life insurance plan to be useful and effective it needs to be tailored to the needs of you and your family.


While buying a plan one needs to take into consideration the current income, loans if any, the expenses etc. of a family. Your life insurance plan will only be useful if it provides sufficient cover to your family in case of an unfortunate incident. There are a lot of life insurance companies in India that provide multiple plans. To choose one that suits your needs the best you need to look into all of the above factors .


For a first time investor it can be difficult to choose which life insurance is best for them. Let’s take a look at all the Life Insurance Policies available so that you can make an informed decision.

Term Insurance:

Term Insurance


It’s the simplest type of insurance. Here , your family is assured a pre-decided amount in case of a death, if it takes place within the term of the insurance. If it doesn’t the insurer does not have to pay anyone. The lure of this type of insurance is the low premium .

Endowment Policy:

Endowment Policy


This policy has a dual benefit. One part of the premium goes to the insurance while the other part is invested in equity or debt. At the end of the term or in case of the death of the policy holder, a lump sum is paid to the family.

Whole Life Insurance:

Whole Life Insurance


This policy provides cover for the entire life of the policy holder or for a hundred years whichever’s earlier. In addition to that, the policy also calculates a bonus on the amount assured, which it then pays to a nominee after the death of the policy holder.

Child Insurance:

Child Insurance


Child Life Insurance pays a lump sum amount to the child of the policy holder in case of his/her death. This amount is paid to the child at set intervals as planned by the policy holder. This insurance is a good choice to secure your child’s future.

ULIP (Unit Linked Life Insurance):

ULIP ( Unit Linked Life Insurance )


In this type of life insurance, the premium paid by the policy holder is divided into two parts, one goes to the life insurance and the other goes to mutual funds as investment. A ULIP holder has the option of either investing in equity or in debt. The money is invested during the term of the policy is paid to the policyholder or his/her nominee on maturity.

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