What is Life Insurance ?

Life insurance is a type of insurance policy that provides financial protection to the policyholder's family or dependents in case of the policyholder's death. It pays a lump sum amount to the nominee or beneficiary of the policy in case of the policyholder's demise during the policy term.In India, life insurance policies are offered by several public and private insurance companies. These policies are designed to provide financial security to the policyholder's family in case of unexpected events.

Types of Life Insurance Policies

• Term Insurance Policy :

  This policy provides coverage for a specified term or duration. It pays a lump sum amount to the nominee or beneficiary of the policy in case of the policyholder's death during the policy term. It is the most affordable type of life insurance policy.

• Whole Life Insurance Policy :

  This policy provides coverage for the entire life of the policyholder. It pays a lump sum amount to the nominee or beneficiary of the policy in case of the policyholder's death.

• Endowment Insurance Policy :

  This policy provides coverage for a specified term or duration. It pays a lump sum amount to the nominee or beneficiary of the policy in case of the policyholder's death during the policy term. Additionally, it also pays a maturity benefit if the policyholder survives the policy term.

• Money Back Insurance Policy :

  This policy provides coverage for a specified term or duration. It pays a part of the sum assured at regular intervals during the policy term. It also pays a lump sum amount to the nominee or beneficiary of the policy in case of the policyholder's death.

• Unit-Linked Insurance Plan (ULIP) :

  This policy provides coverage for a specified term or duration. It also allows the policyholder to invest in different funds such as equity, debt, or balanced funds. The returns from these investments are linked to the market performance.

Benefits of Life Insurance Policies

• Financial Security :

  Life insurance policies provide financial security to the policyholder's family or dependents in case of the policyholder's death.

• Tax Benefits :

  Premiums paid towards life insurance policies are eligible for tax deductions under Section 80C of the Income Tax Act.

• Loan Against Policy :

  Policyholders can avail loans against their life insurance policies in case of financial emergencies.

• Wealth Creation :

  Some life insurance policies such as endowment policies and ULIPs provide the opportunity for wealth creation by investing in different funds.