Eight Types of Life
Insurance policies:
What Type
Should You Choose..?
By Mr. Chandan
Khasnobis, IndiaFirst
Life Insurance
With multiple
categories of insurance plans available, choosing a category that matches your
needs will allow you to realise the policy benefits to the maximum.
Read on to know how
you can match your need with an ideal category.
Consider this
scenario..
You wish to buy an insurance policy that will
give you a large cover at minimal costs.
Or, you wish to
secure your child’s future.
Or, you wish to build
long-term savings through market-linked returns with an insurance cover.
Bearing in mind such
different needs, life insurance companies offer multiple products, each
designed to meet a specific need.
Benefit of choosing a
tailored product:
By choosing a product
category that matches your need, you can be rest assured that your need will
enjoy the safety net offered by life insurance, and, therefore, will be met in
case of all eventualities.
Broad insurance
categories..!
Though each product
category has multiple policies, all policies can be broadly categorised as
follows:
- Pure Term plans..!
It allows you to
enjoy a large insurance cover at minimal costs, in case of death during the
policy term, your dependents will receive the policy sum assured, but if you
outlive the policy term, you are not entitled to receive anything.
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| Chandan Khasnobis, IndiaFirst Life Insurance |
- Endowment plans..!
These types of
policies allow you protection and savings, and on maturity or death, the policy
pays out the sum assured plus accumulated bonuses.
- Whole life plans..!
With this kind of
policies, you can enjoy life cover throughout your lifetime and on death your
dependents will receive the policy sum assured plus accumulated bonuses.
- Money-back plans..!
You receive periodic payouts for meeting
financial commitments at key stages in life.
On death during the
policy term, your dependents will receive the policy sum assured plus bonuses.
Remember, earlier
payouts received are not deducted.
- Unit-linked insurance plans (ULIPs)..
It allows you to
enjoy market-linked returns and speed up the wealth creation process. While a
portion of the premium paid is towards the insurance cover, the remaining is
invested in an investment fund of your choice.
On death or / maturity, depending on the plan features, the
payout includes higher of the policy sum assured and fund value or / both.
- Pension plans..!
These plans help you
build a corpus for your retirement that will allow you to enjoy financial
independence. Based on the frequency of your choice, you receive a regular
stream of income from the same.
- Child plans..!
This allows you to secure your child’s future
even in your absence.
You receive periodic
payments that will give you financial support when your child reaches his/her
milestones. On death of the parent, in most cases the basic sum assured is
paid, future premiums waived and the periodic payments continued to be made as
per the plan.
- Loan Protection plans..!
You can secure your
loan liabilities under all circumstances. On completion of the loan repayment,
the insurance cover ceases or can be easily surrendered, depending on the plan
terms.
In case of death /
total and permanent disability during the policy term, the policy proceeds can
be used to settle the outstanding loan amount.
However, before you
buy any plan ask yourself do you need insurance?
If “yes”, how much
cover..?
The cover will depend
on your needs & your premium paying capacity.
Choose a premium
amount that you can comfortably pay over the policy term.
Finally, ask why you
need insurance?
Once the specific
need is clear, pick a category that best serves your need. The policies
available within the chosen category will be the right policy for you.
About the author..
Mr. Chandan Khasnobis
is Director & Appointed actuary of IndiaFirst Life Insurance.
Mr. Chandan carries with him a comprehensive experience of about 40 years in Life Insurance, Pension, General Insurance, Re-insurance, Administration, Marketing and Actuarial Education. He was the Appointed Actuary for Aviva India Life Insurance from 2006 to 2009.
Prior to his job in Aviva India, he was FSAVC Pension Review Actuary for Canada Life (UK). From 1997-2000 he held the position of Company Actuary / Senior Consultant in Zimbabwe Actuarial Consultants/ Fidelity Life Assurance of Zimbabwe Pvt. Ltd.. He was also the Deputy General Manager/ Actuary Kenindia Assurance Pvt. Ltd., from 1994 to1997. He worked for Life Insurance Corporation of India as Assistant Divisional Manager before this.
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| Mr. Chandan Khasnobis, IndiaFirst Life Insurance |
CMr. handan symbolizes knowledge and humility. He is a Fellow of Institute of Actuaries, London (FIA), Fellow of Actuarial Society of India (FASI), and Fellow of Indian Insurance Institute (FIII). He has a B.Sc. degree with honors in Physics.
He is currently a council member of the Institute of Actuaries of India. He has worked in various committees under IRDA and as an examiner of Institute of Actuaries of India examinations. Also, he has worked as a member of the Life Technical Sub-Committee of Association of Kenyan Insurers as well as for General Insurance Technical Sub-Committee of Kenindia Assurance Company. In addition to these he has also been a part time lecturer for B.Sc. in Actuarial Science at the National University of Science and Technology, Zimbabwe.
He is married to Ms. Moulika. They have two daughters. He loves watching cricket and reading classics.
Web site: www.indiafirstlife.com
Email: Chandan.khasnobis@indiafirstlife.com
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