Kinds of Life Insurance Policy:
The major types of life insurance policies issued by a company are as under:
1. Whole life Insurance Policy:
Whole life insurance policy is that policy which is not issued for a particular
period of time but for the whole life of the insured. The insured pays premium through out his lifetime. The payment of policy amount is made to the beneficiaries in case of death of insured. It can further divided into three types:
a) Straight life Insurance:
The straight life insurance policy is that policy where the policyholder has to pay a straight amount o premium as long as he is alive.
b) Limited Payment Life Insurance:
Limited payment life insurance is that policy when the policyholder has to pay the amount of premium for stated number of years, e.g. payment may be for twenty years or up to the age of sixty-five years etc.
c) Single Premium life Insurance:
Single payment (premium) life insurance policy is a policy where the premium is paid once at the time of purchase of policy.
2.Term Life Policy:
Term insurance policy is a policy when the amount of policy becomes เชน
payable only if the insured dies before the expiry “of term (time) for which policy
was issued. If the policyholder does not die with in specific time period, the
company has not to pay the amount of policy to the policyholder. The term life
policy can be converted into whole life or endowment life insurance policy.
3. Endowment Life Policy:
Endowment life insurance policy is that policy which provides protection up to a specific period of time. The company has to pay the amount of policy at the expiry of the stated period. If the insured dies before the maturity of the period, the amount of the policy becomes payable to the beneficiary. The premium is payable on such policies up to the expiry of time period.
4.With Profit Policy:
The insurance policy where the insured or the beneficiary has right to get the amount of policy along with the profit declared by the company at the date of maturity is known as “with profit policy”. When the profit is allowed the whole life, term or endowment policy, such policies become with profit policies.
5.Annuity Insurance Policy:
Annuity insurance is a policy where a person pays premium to the insurance company and insurance company promises to pay a series of equal payments known as annuity for a number of years. This policy is oftenly purchased by the parents to provide regular source of income to their dependent children. The amount paid as premium for such policies is known as consideration for annuities.
6.Group Insurance Policy:
6. Group insurance policy is always purchased by the employers to insure their employees collectively. When any of the employees dies or becomes disable during his service time, the compensation is paid by the insurance company, otherwise the premium paid by the employer is not refundable.
7. Children’s Education Policy:
The higher education is costly and it becomes difficult for the parents to bear the educational expenses of their children. So for this purpose, the parents insure the lives of their children. For a specific time period. When the period expires, the amount of policy becomes payable and it can be easily utilized for the education of the children. Such policy is known as children’s education policy.
8. Joint Life Policy:
When a life policy is purchased to cover the lives of two or more persons such policy is known as joint life policy. It is issued for a specific time period. When any member of joint life policy dies, the amount of the policy becomes payable to the other members of the policy. It is most suitable for the firm or for the members of the same family.
9. Family Protection Policy:
This policy is issued for a specific period of time. If the policyholder dies before the maturity of the policy, the insurance company pays a specific amount on monthly, quarterly or on annual basis to the heirs of the insured up to a specific period of time. But if the policyholder survives up to the completion of policy period, he gets the amount of policy only.
10. Children’s Marriage Policy:
Like children’s education policy, the parents purchase a life insurance policy for a specific period of time to meet the marriage expenses of their children. Dfa Ho The amount of such policy becomes payable at the expiry of time period. Such policy is known as children’s marriage policy.
11. Last Survivor’s Policy:
This policy is issued to two or more persons collectively. The amount of policy becomes payable when the last member of the policy dies. Until any of the policyholders survives, the policy amount does not become payable.
