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What are the types of life insurance policies?

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(i) Whole Life Policy: In this kind of

policy, the amount payable to the

insured will not be paid before the

death of the assured. The sum then

becomes payable only to the

beneficiaries or heir of the deceased.

 

(ii) Endowment Life Assurance

Policy: The insurer (Insurance

Company) undertakes to pay a specified

sum when the insured attains a

particular age or on his death which

ever is earlier. The sum is payable to his

legal heir/s or nominee named therein

in case of death of the assured.

Otherwise, the sum will be paid to the

assured after a fixed period i.e., till he/

she attains a particular age. Thus, the

endowment policy matures after a

limted number of years.

(iii) Joint Life Policy: This policy is

taken up by two or more persons. The

premium is paid jointly or by either of

them in instalments or lump sum. The

assured sum or policy money is payable

upon the death of any one person to the

other survivor or survivors. Usually this

policy is taken up by husband and wife

jointly or by two partners in a

partnership firm where the amount is

payable to the survivor on the death of

either of the two.

(iv) Annuity Policy: Under this policy,

the assured sum or policy money is

payable after the assured attains a

certain age in monthly, quarterly, half

yearly or annual instalments. The

premium is paid in instalments over a

certain period or single premium may

be paid by the assured. This is useful

to those who prefer a regular income

after a certain age.

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