Life Insurance Policies - Different Types | Features | Premiums | How to buy? | ETMONEY

Life insurance is an important part of one’s personal finance portfolio. But the real question is - which life insurance?
In this video ETMONEY’s Shankar Nath examines 5 different types of life insurance policies. He talks about their construct, features, premiums, who should buy such a policy, what are the things one should be careful of, and how one can make the most of these policies

Topics covered
00:00 Introduction
00:32 TERM INSURANCE POLICY
03:50 WHOLE LIFE INSURANCE POLICY
06:09 ENDOWMENT POLICIES
07:37 MONEY BACK POLICY
10:11 UNIT LINKED INSURANCE PLANS (ULIPS)
12:05 ETMONEY OPINION

1. TERM INSURANCE POLICY
A term insurance policy is the simplest form of life insurance and is formally called protection plans. A term insurance policy is one where monetary compensation is paid to the nominee or beneficiary under the policy upon the death of the policyholder.
There are a couple of important points to note here,

1. The benefits under term insurance are payable only upon the death of the policyholder .. which means if the policyholder survives, then no maturity or survival benefits are payable
2. The death of the policyholder often covers most situations including sickness and accidents

Link to video

2. WHOLE LIFE INSURANCE POLICY
A whole life insurance policy is for all practical purposes a permanent life insurance policy.
This means this policy extends life insurance coverage until the demise of the policyholder .. post which the nominee is paid the benefits that are listed under this policy.
Now the phrase “whole life policy” is not a standardized one and we have seen different applications of that with different insurance companies

For example - some insurers use it as an extension of a term insurance plan that simply goes on till the age of 99 or 100 years and nothing else is paid out other than the death benefit.
But then there are some other insurers, who define a whole life policy as one .. which not only has death benefits but also come with maturity benefits, survival benefits and even a bonus in some cases

3. ENDOWMENT POLICIES
An endowment policy is one which apart from covering the life of the insured also helps the policyholder save regularly over a period of time. This money that is saved is then given to the policyholder as a lump sum amount once the policy matures. This type of policy is pitched as a savings plan .. and is almost always linked to some future event which is a good 10 to 15 years away. For example, a popular pitch made by LIC agents to parents is to start contributing towards an endowment plan for their child’s education or marriage.
From a benefits perspective, an endowment policy comes with a life cover which is paid to the nominee upon the death of the policyholder
These plans are quite clearly savings instruments that offer lower than average returns.

4. MONEY BACK POLICY
Money-back policies are another popular life insurance category
Let’s understand how money-back policies are constructed by examining the Life Insurance Corporation of India or LIC’s New Money Back Plan

So as per the policy terms, a policyholder needs to pay premiums for 15 years so not 20 years but 15 years and there are potentially 4 benefits within the plan

1. Death benefit that goes up to 125% of the basic sum assured .. and is paid if the policyholder expires anytime within the 20-year policy term
2. Survival benefit which gets activated at the end of the 5th, 10th, and 15th policy year .. and the policyholder is paid 20% of the basic sum assured
3. Maturity benefit .. which amounts to 40% of the basic sum assured and is paid out if the policyholder survives the entire 20-year policy term
4. The bonuses are nothing but the policyholder receiving a share in the profits of the insurance company.

5. UNIT LINKED INSURANCE PLANS (ULIPS)
ULIP or unit-linked insurance policy is an investment product that has insurance built into it.

ULIPs are pitched as a triple benefit product offering investment, insurance, and tax-saving benefits. ULIPs come with charges in many forms like a premium allocation charge, a policy administration charge, switching charges, and a few more expenses

#ETMONEY​ #Typesofinsurance #Terminsurance #ULIPs #Endowmentplan

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[saikrishnakaruturi]

Your team has mastered the skill of research, classification and articulation. Production values like background score, content presentation and Host attitude should be given credit too. Especially this video and international mutual funds are very well presented. Excel sheet was greatly helpful. I am ready to be paid member for youtube content also. I wish you guys do on PMS too.

[shankarprasad]

I just love everything about this. Flawless, seamless, just perfect

[pradbssi]

Full details provided about different types. this is what i was looking these many years. you are gem.

[pratikdhole]

So many misconceptions cleared today thanks to your simple explanation..Gratitude.

[abhishekmittal]

I've few questions
1. In Ur example Money back policy sum received at 5th, 10th year is taxable or not?
2. Diff b/w moneyback and endowment plans.
3. Which policies have mandatory lump sum premium, like one time premium. Which category?

[Vijay_]

A really good video on insurance till one.
I have a request so now can u dig depper on each insurance types and their different factors like which insurance better from market, adv, disadvantages, hidden rules etc.so that u can make 5 different videos and also we get deeper knowledge of each policy.

[tusharrao]

thanks for sharing very informative video 👍

[Saibeti]

PERFECT AS ALWAYS....WIDOUT UNNECESSARY FRILLS & & EASIEST-2-FOLLOW EXPLANATION...THANKYOU SO MUCH...SAI BLESS..!!!

[anandpanangipally]

Could you run an episode on pension plan (policies)?

[mohanbrij]

Please make a video on cause of rejection of claim specially of term insurance and things to avoid while buying an insurance.
Regards

[priyankasahu]

Your words are really informative and valuable as always.

[caldwellmanners]

Alright, so here is the dilemma. I do not have dependents, but still have siblings and nieces and nephews who could benefit from an end of life sum assured. However, God willing, if I do live for another 20 years, they will not be in need of such benefit, and term insurance will really not be of much use; getting the money back for retirement sounds right to me. What are your thoughts on using an Endowment or Money Back plan as a part of one's fixed income portfolio? The survival benefit could be used toward an annuity plan at retirement. Thank you

[apurva]

Do you think we should keep insurance of permanent disability or Terminal illness cover since we could live but won't die to get any insurance

[shadowsus]

I have law of insurance exam tom, thank you so much for the beautiful explanation 🙏🏼😭💯

[nareshgadlya]

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App bhorasa

[gauravgupta]

Is your app registered with sebi for providing a platform for mutual fund investment. No where in google i find out your registration no.

[premjha]

Sir If a person dies and does not have any life insurance or cover but he was a tax payer. Is he eligible for any kind of benefits from IT department?

[mohanbrij]

Why insurance companies donot issue term insurance to housewives, I tried to buy many times with different insurers for my better half who is home maker but couldn't find any insurers willing to offer term insurance.

[nabarunbanerjee]

Thank you Sir. And please provide features of jivan umang of LIC.

[anilsbidve]

What do you think on leveraging money on life insurance account? Is it a advantage?