Once you have decided to buy Insurance finding the right plan is very important. You need to understand the various types of Insurances available and then filter down to the ones that suit your current stage of life as well as the needs. However, you must also keep in mind and plan for the future. Let us look at the type of plans available today
Which Type of Plan is Best for You?
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Whole Life
This is a permanent insurance plan where you get two funds, one being the life cover and the other being an investment fund. The premium in this kind of a plan is divided between a fixed amount, which your nominee will get in case of death, and another cash value that builds over time and is exempt of taxation. You can borrow from this amount and this too is tax free. The premium amount generally remains the same throughout the policy's tenure.
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Variable Life
This is called a variable plan because there are two separate accounts created, one being the permanent policy and the other being the investment fund, which is invested in bond funds, equity funds or money market funds, as per the company's investment portfolio. Due to the uncertain nature of the market, the value of the cash and death benefits are not fixed. This type of insurance combines the growing potential investments with the traditional savings investment.
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Universal Life
This type of a plan provides the same life protection as a Whole Life Plan but with a slight change in the premium policy. Opting this variant, you can adjust up or down the premium value and the cash protection as per your needs and that is why it is also known as a flexible insurance plan. Another variant is the variable-universal plan, which allows flexibility to adjust the premium, death benefits and investment funds through the duration of the policy.
Term Insurance: This type of policy guarantees the sum assured in case of death of the insured during the term of the policy. It runs for a specified period of time, which is a maximum of 30 years. There are variants of this plan available too, with regards to the premium, such as increasing, decreasing, convertible and level.
You should choose a life insurance plan based on your needs and the finances available. It is beneficial to start young, since the premium rates will be much lower. Checkout plans like Life Future Invest plans by Bharti AXA and reap the benefits later in life