There is a wide variety of life insurance products that exist in the Indian market. A few of them are:

1. TERM INSURANCE PLANS

Term life insurance policies are those that can be purchased for a fixed period of time. These policies do not have a cash value, and are thus, relatively cheap in comparison with other kinds of life insurance policies. However, the policy will only turn out beneficial in case the policyholder dies during the policy term. Most of the prominent life insurance companies in India offer term life insurance policies for terms such as 10 or 20 or 30 years, and the most attractive feature about these policies is that they come with a built-in option that allows the policyholder to convert them into permanent life insurance policies.

2. ENDOWMENT POLICY

These policies are somewhat similar to the traditional term-life insurance policies as they pay out a lump sum amount to the beneficiary or nominee in case of the death of the policyholder. However, endowment plans also have an extra clause that mentions that the policyholder will receive a lump-sum amount in case he / she survives until the date of maturity.

3. UNIT LINKED INSURANCE PLANS (ULIPs)

ULIPs, are insurance policies that provide you the opportunity to create wealth, in addition to offering the security of life cover. The premium payments made towards an ULIP are split and a part of it is sent toward the life cover of the policyholder while the remainder is dedicated to a large pool of money. This large pool of money, also known as Fund, is then invested in debt, equity, or both, and the returns of investment will be determined by how well the fund that you have chosen performs.

4. MONEY BACK POLICY

Money back insurance policies, as the name might suggest, are those that pay out a lump sum amount to the beneficiary or nominee of a policyholder in case of the untimely death of the policyholder. The maturity benefits offered by money back insurance policies will be in the shape of many different guaranteed “survival benefits” that are allotted proportionately throughout the policy. Simply put, a money back insurance plan is just an endowment policy that comes offers the benefit of regular liquidity.

5. WHOLE LIFE POLICY

Ordinary life, or straight life insurance plans as they are also called, whole life insurance policies are those whose terms and conditions remain unchanged for the entirety of the policy term provided that the policyholder makes the required premium payments.

A specific predetermined amount will be paid to the beneficiary or nominee in case of the untimely death of the policyholder while the policy term is in progress. The policyholder, however, has the freedom to borrow money against a whole life insurance policy, or withdraw the policy at any time. Since whole life insurance policies have a maturity age of 100 years, the policyholder will receive the maturity benefits in the form of a matured endowment if he / she is alive on the date of maturity.

6. A 6. ANNUITY/PENSION PLANS

Annuity Life Insurance Policies are long-term contracts that can be purchased from insurance providers. Annuities are designed in a manner such that they help in accumulating assets with a view to collecting income for retirement. However, they do have their limitations. In case of early withdrawals, customers will have to pay penalties and the earnings under annuities are taxable in the same manner as ordinary income.