How many types of Life Insurance?

Insurance: It is a contract between two persons, the person who takes insurance is known as insured and another is insurer who offer the insurance contract. It is a contract in which the insurer is liable to pay a fixed sum of money on happening a certain or uncertain events to insured as agreed in a contract. And in exchange of it the insured person pay fixed premium to insurer. The subject of a contract is a life, property or health of a insured person or the things that related or something that affects the insured person.

Life Insurance: The insurance is taken by insured to protect his life for uncertain events in a future. And the insurer is liable to pay certain sum of money on happening uncertain events like death to its nominee.

Types of Life Insurance:

Term Insurance: In this insurance the life is insured for fixed period and the premium is low. The insurer will pay lump sum amount only after death of an insured person during a fixed period. Nothing is paid on survival of an insured person.

Whole Life Insurance: This insurance protects the whole life of an insured person and the premium amount is low. The insurer is liable to pay lump sum insured amount on a death of an insured person and the time period doesn’t matter in a contract.

Endowment Insurance policy: It is a combination of term insurance and pure endowment policy. The insurer is liable to pay insured amount either on death of a insured person or by maturity date of a insurance contract. And in exchange insured person pays high premium to insurer.

Money Back Policy: In this policy life cover risk is provided by insurer and simultaneously pay some percentage of insured amount to insurance holder on fixed interval.

Unit Linked Life Policy (ULIP): In this life insurance policy the premium paid by insured person is invested in a bond, equity or debt fund and if the insured person dies then death benefits will be given to nominee. By investing a premium amount insured person earn some extra cash with assurance of a life.

Single Life Insurance: This life insurance is taken by single person. The insurer pays the benefits on death of an insured.

Joint Life Insurance: This type of life insurance is taken by business partners or spouses. The reason behind taking this insurance is happening any uncertain event in a life of one person affects the life of another person. Joint life insurance is two types:

First to die policy: Under this policy if the first person dies the benefits pays to the survival partner.

Second to die policy: Under this policy if both insured person is being dead then the insurer pay the benefits or lump sum amount to nominee. If any insured person is alive then no insured amount pay by insurance company.

Group Life Insurance: The life insurance is taken by insured person to protect the life of a group of people against the uncertain events. For example employer takes group life insurance for his workers.   

Salary Saving Schemes: Under this scheme the employer deducts the insurance premium to insured salary and pay lump sum amount to insurance company.