What is Life Insurance & What are the Types of Life Insurance?

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Life insurance:

Life insurance LIFE INSURANCE  is a contractual agreement between a policyholder and a life insurance company. Policyholders agree to pay specific periodic amounts (premiums) for the term or duration of the policy. It  serves two major purpose: (1) to substitute for the insured's income if he or she Dies a guaranteed sum (face amount) is paid to one or more named beneficiaries. (2) to qualify the insured for favorable tax treatment. If the insured survives the term then, depending on the type of the policy, he or she may receive the full or a part of the face amount of the policy.

Type of life insurance:

Type of life insurance Life Insurance Endowment plans Whole life Policy Term Insurance Money Back Policy ULIP

Endowment plans:

Endowment plans Endowment Plans are designed to pay a lump sum after a specific term (on its 'maturity') or on death. Typical maturities are ten, fifteen or twenty years up to a certain age limit. Endowments can be cashed in early (or surrendered) and the holder then receives the surrender value which is determined by the insurance company depending on how long the policy has been running and how much has been paid into it.

Whole life policy:

Whole life policy Whole Life Policy is guaranteed to remain in force for the insured's entire lifetime, provided required premiums are paid, or to the maturity date. Premiums are fixed, based on the age of issue, and usually do not increase with age.The insured party normally pays premiums until death, except for limited pay policies which may be paid-up in 10years, 20 years, or at age 65

Unit link insurance plan (ulip):

Unit link insurance plan ( ulip ) A Unit Link Insurance Plan is basically a combination of insurance as well as investment. A part of the premium paid is utilized to provide insurance cover to the policy holder while the remaining portion is invested in various equity and debt schemes Policy holders have the option of selecting the type of funds (debt or equity) or a mix of both based on their investment need and appetite. 

Money back policy:

Money back policy Money Back Policy provides life coverage during the term of the policy and the maturity benefits are paid in installments. The survival benefits in every 5 years. The plan is available with 20 years and 25 years term. In the event of death within the policy term, the death claim is made up of full sum assured without deducting any of the survival benefit amounts already paid.

Term insurance:

Term insurance Term insurance is a type of life insurance policy that provides coverage for a certain period of time , or a specified "term" of years. If the insured dies during the time period specified in the policy and the policy is active or in force then a death benefit will be paid to one or more named beneficiaries.

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