How to Choose Right Life Insurance Plan in India?

A guide to help you choose the right life insurance plan in India.

How to Choose Right Life Insurance Plan in IndiaIf you are single with no dependent, you don’t need a life insurance policy. However, if you have dependent like parents, spouse or children, who depend on your income, you need to buy a life insurance policy. There are different variants of each of life insurance products. Life insurance plans fulfil four needs — protection, savings, investment, and the tax benefit. A look at the four life insurance products — term plan, endowment plan, unit-linked insurance plan (ULIP), and money back plan. Money back and Endowment plan come under the traditional insurance plan.

Term Insurance Plan: Term plan is the cheapest life insurance product that will give you a higher sum assured. Term insurance is the simplest, purest and perhaps the most useful form of life insurance. The money you pay as premium (the cost to buy the product) will give you a life cover. Term insurance is a 100% protection plan, which means it has no investment component. If something untoward happens during the duration of the policy, the sum insured is paid out to the policyholder’s dependents. If the policyholder survives the duration of the policy, the risk cover comes to an end. Term Insurance gives you a higher sum assured for a lower premium.

Endowment Plan: Until recently, endowment insurance plans were the most popular form of life insurance. In Endowment plan, you keep putting in money and get something back when your policy matures. Endowment plan is a life insurance plan where you are forced to save money. An endowment policy is a life insurance policy designed to pay a lump sum on death or its maturity.

Money back Plans: A money back policy is similar to endowment. It is an endowment plan with the benefit of liquidity. Money back plans are designed to provide a stable flow of money to the person who invests in them. In this policy, money is given on a regular interval, instead of getting the lump sum amount at the end of the term.

ULIP (Unit Linked Insurance Plan) : A Unit Linked Insurance Plan (ULIP) is a product offered investors both insurance and investment under a single integrated plan. ULIP allows you to choose where you want to park the money meant for investment — balanced, equity or debt. ULIP is a combination of insurance and investment. Before investing in a ULIP insurance plan, it is always advisable to compare the historical returns.

Top Life Insurance Companies in Ahmedabad

  1. Life Insurance Corporation of India (LIC)
  2. SBI Life Insurance Company
  3. Kotak Life Insurance
  4. HDFC Standard Life Insurance
  5. IDBI Federal Life Insurance
  6. Birla Sun Life Insurance
  7. Bajaj Allianz Life Insurance
  8. ICICI Prudential Life Insurance
  9. Max Life Insurance
  10. Reliance Life Insurance
  11. Tata AIA Life Insurance Company
  12. PNB MetLife India Insurance Company
  13. Aviva India
  14. Exide Life Insurance
  15. Aegon Life Insurance Company
  16. IndiaFirst Life Insurance Company
  17. Peerless Group
  18. Sahara India

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