Types of Insurance Products & its comparison

Following are the products generally offered by Life Insurance Companies in India. The detailed description of each product, its feature and significance is described in this blog. Each product serve the specific purpose. Although there could be other products also but feature of all the product would be more or less the same as shown in this blog.

1.       Pure Term Products : Pure term products are pure risk products & have no maturity benefits. In Case, the person (whose life is insured) dies during the term, the benefits equivalent to Sum Assured are payable under the policy and in case of his survival till the end of the selected term the policy normally expires without any benefit becoming payable

Other Feature are as follows:

·         Premium Payment  Mode : Single/Monthly/Quarterly/Half Yearly/Annually

·         Term of Insurance: 1 yr to 35 yrs

·         Minimum/Maximum Age at Entry: 18 yrs/70 yrs

·         Death Benefit: Yes

·         Maturity Benefit: No

·         Surrender: Generally in case of Single Premium

·         Sum Assured: As per Underwriting Rules

·         Rider Available :Yes

·         Tax Benefit on Premium Paid :Section 80C (IT ACT,1961) is available

·         Tax Benefit on Death/Maturity: Section 10(10D) (IT ACT,1961) is available

2.       Term Products with Return of Premium: These products are pure risk products. In Case, the person (whose life is insured) dies during the term, the benefits equivalent to Sum Assured are payable under the policy and in case of his survival till the end of the selected term the policyholder normally get refund of all the premium paid during the policy term

Other Feature are as follows:

·         Premium Payment  Mode : Single/Monthly/Quarterly/Half Yearly/Annually

·         Term of Insurance: 1 yr to 35 yrs

·         Minimum/Maximum Age at Entry: 18 yrs/70 yrs

·         Death Benefit: Yes

·         Maturity Benefit: Return of Premium paid.

·         Surrender: Yes

·         Sum Assured: As per Underwriting Rules

·         Rider Available :Yes

·         Tax Benefit on Premium Paid :Section 80C (IT ACT,1961) is available

·         Tax Benefit on Death/Maturity: Section 10(10D) (IT ACT,1961) is available

3.       Endownment Proucts: These products are risk plus investment products. In Case, the person (whose life is insured) dies during the term, the benefits equivalent to Sum Assured are payable under the policy and in case of his survival till the end of the selected term the policyholder normally get sum assured and bonus, if any

Other Feature are as follows:

·         Premium Payment  Mode : Single/Monthly/Quarterly/Half Yearly/Annually

·         Term of Insurance: 5 yr to 35 yrs

·         Minimum/Maximum Age at Entry: 18 yrs/70 yrs

·         Death Benefit: Yes

·         Maturity Benefit: Yes

·         Surrender: Yes

·         Sum Assured: As per Underwriting Rules

·         Rider Available :Yes

·         Tax Benefit on Premium Paid :Section 80C (IT ACT,1961) is available

·         Tax Benefit on Death/Maturity: Section 10(10D) (IT ACT,1961) is available

4.       Money Back Plans: These products are risk plus investment products. In Money Back plan, Generally certain percentage of sum assured is return at the end of each pre-decided period. In case of Death, the sum assured reduced by amount already paid is payable to legal heirs of policyholder. For E.g Sum Assured :Rs. 3 Lakh ,Money Back : After every 5 yrs @ 20%,Policy Term:20 yrs

So Benefit is payable as follows:

5^th Year: Rs. 60,000 (i.e. 20% of 3 Lakh)

10^th Year: Rs. 60,000 (i.e. 20% of 3 Lakh)

15^th Year: Rs. 60,000 (i.e. 20% of 3 Lakh)

20^th Year: Rs 120,000 plus bonus if any.

Suppose life insured dies during 8^th year of policy then his legal heir will get Rs. 240,000 (Rs. 3 lakh reduce by Rs. 60,000 already paid at the end of 5^th year)

Other Feature are as follows:

·         Premium Payment  Mode : Single/Monthly/Quarterly/Half Yearly/Annually

·         Term of Insurance: 5 yr to 35 yrs

·         Minimum/Maximum Age at Entry: 18 yrs/70 yrs

·         Death Benefit: Yes

·         Maturity Benefit: Yes

·         Surrender: Yes

·         Sum Assured: As per Underwriting Rules

·         Rider Available :Yes

·         Tax Benefit on Premium Paid :Section 80C (IT ACT,1961) is available

·         Tax Benefit on Death/Maturity: Section 10(10D) (IT ACT,1961) is available

5.       Children Plans: These products are risk plus investment products. The intention of this product is to support the Child education/marriage in case of sudden death of Insured person (normally Father). In Case, the person (whose life is insured) dies during the term, the benefits equivalent to Sum Assured are payable under the policy and in case of his survival till the end of the selected term the policyholder normally get sum assured and bonus, if any. These plan also have feature under which future premium is waived off.

For E.g.

Life Insured	Sum Assured	Premium	Policy Year	Death in
Father	300,000	10,000 p.a	20 Yrs	6th Year

Policy Feature is say: At the time of Death Child will get Sum Assured plus future premium will be waived off plus additional sum assured at the end of policy term.

So on 6^th year child will get Rs. 300,000 & policy will remain in force.

Future premium will be waived off i.e future premium of Rs 140,000 is not payable(14*10,000)

At the end of 20^th year, child will again receive Rs 300,000.

Other Feature are as follows:

·         Premium Payment  Mode : Single/Monthly/Quarterly/Half Yearly/Annually

·         Term of Insurance: 5 yr to 35 yrs

·         Minimum/Maximum Age at Entry: 18 yrs/70 yrs

·         Death Benefit: Yes

·         Maturity Benefit: Yes

·         Surrender: Yes

·         Sum Assured: As per Underwriting Rules

·         Rider Available :Yes

·         Tax Benefit on Premium Paid :Section 80C (IT ACT,1961) is available

·         Tax Benefit on Death/Maturity: Section 10(10D) (IT ACT,1961) is available

6.       ULIP Products: These products are risk plus investment products. The investment component in premium is invested in equity and/or debt securities. The policyholder is given the option to select different type of fund. In Case, the person (whose life is insured) dies during the term, the benefits equivalent to Sum Assured or Fund Value whichever is higher are payable under the policy and in case of his survival till the end of the selected term the policyholder normally get amount equivalent to Fund Value.

Other Feature are as follows:

·         Premium Payment  Mode : Single/Monthly/Quarterly/Half Yearly/Annually

·         Term of Insurance: 5 yr to 35 yrs

·         Minimum/Maximum Age at Entry: 18 yrs/70 yrs

·         Death Benefit: Yes

·         Maturity Benefit: Yes

·         Surrender: Yes after 5 years

·         Sum Assured: As per Underwriting Rules. Min Sum Assured is 5 times of Annual Premium

·         Rider Available :Yes

·         Tax Benefit on Premium Paid :Section 80C (IT ACT,1961) is available

·         Tax Benefit on Death/Maturity: Section 10(10D) (IT ACT,1961) is available