Kotak Assured Savings Plan
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Ref. No. KLI/22-23/E-BB/492
Types of Life Insurance: There are many types of life insurance policies in India that you can choose from - Term Insurance, ULIPs, Endowment Insurance, and others.
A life insurance policy provides financial protection to your family in the unfortunate event of death. At a basic level, it involves paying small monthly sums called premiums. However, depending on the type of life insurance products you have opted for at the policy’s maturity, you will receive returns the policy may have earned over the years. Also, in case of the policyholder’s untimely demise during the tenure of the policy, your family will receive a lump sum amount.
Today, there are various types of life insurance products that cater to a wide variety of needs, such as:
This article will help you know what is the classification of life insurance.
1.Term Insurance
2.Whole Life Policy
3.Endowment Policy
4.Money Back Policy
5.ULIP Plans
6.Annuity and Pension
Given below are the basic types of life insurance policies in India. All other life insurance policies are built around these basic insurance policies by combining various other features.
The simplest form of life insurance product is a term insurance policy. Being a pure risk cover policy, term insurance protects the person insured for a specific period. In such type of a life insurance policy, a fixed sum of money called the sum assured is paid to the beneficiaries if the policyholder expires within the policy term.
Scenario 1: If a person buys a ₹2 lakh policy for 15 years, his family is entitled to the sum of ₹2 lakhs if he dies within those 15 years.
Scenario 2: If the policyholder survives the 15 years, though the premiums are not returned, the family is offered financial security.
Term Insurance Benefits:
A whole life policy covers a policyholder against death throughout his life. The validity of this life insurance policy is not defined; hence, the individual enjoys the life cover. Under this life insurance policy, the policyholder pays regular premiums until his death, upon which the corpus is paid to the family.
Whole Life Insurance Benefits:
Enhanced protection: Increasingly, whole life policies are combined with other insurance products to address various needs such as retirement planning, etc.
Endowment policies are among the popular life insurance policies, combining risk cover and financial savings. Policyholders benefit in two ways from a pure endowment insurance policy. First, in case of death during the tenure, the beneficiary gets the sum assured. If the individual survives the policy tenure, he gets back the premiums paid with other investment returns and benefits like bonuses.
Many people prefer this life insurance policy because it gives periodic payments during the term of the policy. In other words, a portion of the sum assured is paid out at regular intervals. If the policyholder survives the term, he gets the balance sum assured.
Money Back Policy Benefits:
Tax benefits: The premiums paid and the returns accumulated through a money-back policy or its ULIP variants are tax-exempt.
ULIPs are market-linked life insurance products that provide life cover and wealth creation options. A part of the amount people invest in ULIP provides life cover, while the rest is invested in the equity and debt instruments for maximizing returns.
ULIP Benefits:
In these life insurance policies, the insurer agrees to pay the insured a stipulated sum of money periodically. The purpose of an annuity is to protect against financial risks and provide money in the form of a pension at regular intervals.
Thus, whatever your financial requirements, there are many types of life insurance plans to ensure that your requirement is fulfilled as per your needs and planning.
Life Insurance Plan |
Insurance Plan Name |
Features |
|---|---|---|
Term Insurance |
Kotak e-term |
|
Savings and Investment Plans |
Kotak Assured Savings Plan Kotak Guaranteed Savings Plan |
|
Retirement Plans |
Kotak Lifetime Income Plan |
|
Health Plans |
Kotak Health Shield |
|
Individuals may have different goals. You must plan for your life insurance goals with the aid of a suitable life insurance coverage. If protecting your family’s financial security is your primary goal, you may be able to find a term insurance plan that offers high coverage at affordable rates.
If you want to save money for your child’s education or if you want to purchase your own dream home, think about investing in a unit-linked insurance plan. A retirement plan that can guarantee consistent income for your ongoing costs after retirement is another option.
You should carry life insurance coverage that is at least ten to fifteen times your annual income, according to several financial gurus. While determining the right life insurance sum, there are a number of factors to take into account. If you have debts, it may be difficult for your family to make ends meet if you were to pass away. You should also put money aside for your kids’ higher education or eventual marriage. If your family’s main provider were to depart, it might be difficult for them to maintain their current standard of living due to inflation. Therefore, you must determine the total of the following:
Using online premium calculators, you may figure out how much of a premium you need to pay for the required quantity of life insurance. Find the policy that provides the best protection at a price that fits your budget by comparing several ones. Take into account how long you will be paying premiums based on your anticipated income over the next few years.
The appropriate length of the policy term is the period during which your family will be financially dependent on you. The usual rule is to subtract your current age from the age at which you anticipate your income to end or at which you aim to achieve a certain life goal in order to determine the optimum insurance term.
Above the course of several years, reputable life insurance providers frequently have a Claim Settlement Ratio (CSR) of over 95%. The CSR is the ratio of the company’s settled claims to the total number of claims filed during a fiscal year. You can check the most recent CSR of the various insurance carriers in India by going to the website of the Insurance Regulatory and Development Authority (IRDAI). It’s also a good idea to study customer reviews to determine how quick and easy your life insurer’s claim process is.
Whole life assurance refers to a life insurance policy that is guaranteed to be in effect until the maturity date or for the insured’s entire lifespan, whichever comes first.
Life insurance serves as both a long-term investment and a means of financial support in the case of an untimely death. Depending on your life stage and risk tolerance, you can achieve your goals, whether they are for your children’s schooling, their marriage, creating your ideal home, or designing a carefree retirement.
Section 80C allows for the claim of a deduction for the cost of a life insurance policy where the policy is purchased in the name of the taxpayer, the taxpayer’s spouse, or the taxpayer’s children.
A term life insurance policy with a 20-year term and a ₹50,000 death benefit costs on average roughly ₹147 per month. You should only use this figure as a starting point because your own life insurance premiums will vary based on your age, the insurer you choose, and the quantity of coverage you choose.
The premium for a life insurance policy is determined by the amount assured as well as other elements including age, gender, cover-up, riders, and personal behaviours like alcohol and tobacco use. The insurance companies set the premiums, which vary depending on the policyholder.
You are free to purchase as many life insurance policies as you like, but you must respect the human life value (HLV) estimate’s cap. HLV is determined by your income and may reach 20 times your annual take-home pay.
Riders are optional, supplemental terms that take effect simultaneously with your base policy and are frequently charged separately. Insurance riders are cost-effective additions to your life insurance policy that you can select.
Ref. No. KLI/22-23/E-BB/2435
