Different Types of Life Insurance Plans: Which One is Best For You

Different Types of Life Insurance Plans

There are different kinds of life insurance, for example...

Term life insurance

Whole life insurance

Universal life insurance

 Final expense insurance

Simplified issue and guaranteed issue insurance

Group life insurance

Endowment Insurance

Money Back Insurance

Child Insurance

Retirement Insurance, etc.

Each of these life insurance plans have their own characteristics and provide different kinds of coverage and benefits. For example, term life insurance policy means you get coverage for fixed term, for example 10, years, 20 years, etc. During this coverage period, you will get coverage for accidents, diseases, etc, and by the end of your term you also get insured amount.

Whole life insurance policy provides death benefit to the beneficiaries, whereas Universal life insurance policy provides coverage for your entire life. What this policy will cover depends on the terms explained in the policy document. Retirement insurance means you pay premiums for 20 years and the get benefits for rest of your life, it is just like the retirement plan that the government gives to its employees.

Since there are different kinds of life insurance policies, you might be confused about what type of insurance plan to choose. The choice of plan depends on your priorities and income. For example, if you want your family to benefit, whole life is better. If you do not have a long term job and do not have any retirement benefits retirement insurance plan can be better.

Building Your Wealth Through Term Life Insurance Policy

You cannot build your wealth through saving, you can build your wealth only through investment. You can either invest in your own business or invest in someone else’s business (equity or stocks). However, investment is risky, therefore, a lot of people avoid investing. Investing also requires a lot of funds and not many people have that kind of liberty.

So, do we have any option?

Off course!

Buy a term life insurance policy

First of all life insurance incorporates both, saving as well as investing. You get better returns than saving but do not have any risks associated with investing.

Secondly, you don’t need a lot of money to buy an insurance policy. Your premium is just a fraction of ensured amount.

If you bought a 20 years policy when you were 20 years and pay premiums for 20 years, by the time you are 40 you will have substantial funds. While the return on your investment might not be as good as stock market investment, however, you don’t always get profits from stock investment, however, you never make a loss with your insurance policy. Return is 100 percent guaranteed. If you encounter accidents or terminal illnesses during your insured period, you also get covered financially.

Buying Insurance Vs. Saving Money in Banks

A lot of people who make little money are too afraid to invest in a fear of losing money, therefore, whatever they can save, they will prefer to save it in a bank. But is saving money in banks a good strategy?

Well, I don’t think so.

If you have little money and if you think investing is too risky, yet you have a desire to make additional money from your money, buy a life insurance policy.

Is buying a life insurance policy better than saving money in banks?

Definitely!

If you buy a life insurance policy, you will be paying mandatory premiums regularly until your maturity period, you will never miss paying premiums.

When your policy matures, you will have a substantial amount.

However, when you are saving money in banks, you might miss your saving schedule because you had to use that money elsewhere.

Your normal saving accounts will give you a very small interest rate, you get a better interest rate on fixed deposit account but in order to use that service, you should already have a large amount of money.

Banks d not provide insurance coverage for your entire funds, however, life insurance will provide financial coverage for accidents and illness. If you die, your nominee will not have to pay the premium yet will receive the full insured amount.