Traditional |
|
|
|
|
Types Of Traditional Life Insurance Products |
Based on the benefit patterns the traditional Life Insurance products can be
categorised into the following types:
1) Term Insurance
2) Whole Life Insurance
3) Endowment Insurance
4) Annuities |
|
Term Insurance provides for life insurance protection for the selected term
(period of years) only. In case the person (whose life is insured) dies during
the term, the benefits 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. Term insurance may be regarded as temporary insurance
and is more nearly comparable with "Property & Casualty insurance" contracts
than the other forms of Life insurance contracts. |
|
|
|
|
Whole of Life Assurance |
As the name suggests, the whole life insurance policies are intended to provide
Life Insurance protection over one's lifetime. The essence of whole life
insurance is that it provides for payment of the assured amount upon the
insured's death regardless of when it occurs. Under these policies, the payment
of the assured sum is a certainty in contrast to the term insurance contracts.
Only the time of payment of the assured sum is an uncertainty. Whole life
policies can be either participating type or non-participating type.
Participating type policies are those which are entitled to a share in the
distributable surplus (profits) of the Life Insurance company, whereby the cash
value of the policy can go up, with the announcement of bonus / dividend.
Non-participating policies have the same benefit throughout the life of the
policy.
There can be the following types of whole life policies:
1. Ordinary Whole Life Insurance
2. Limited Payment Whole Life Insurance
3. Convertible Whole Life Insurance |
|
|
|
|
Endowment Assurance |
These are the most commonly sold policies. These policies assure that the
benefits under the policy will be paid on the death of the life insured during
the selected term or on his survival to the end of the term. Hence the assured
benefits are payable either on the date of maturity or on death of the life
insured, if earlier.
Endowment policies assist in providing for the payment of a lump sum amount for
a specific purpose, say, provision for retirement, meeting the needs of the
child etc. The money required for the purpose will be built up whether the
person is alive till that date or not. Like whole life insurance policies,
endowment policies can also be of participating and non-participating types. |
|
|
|
|
Annuities |
An annuity is a series of periodic payments. An annuity contract is an insurance
policy, under which the annuity provider (insurer) agrees to pay the purchaser
of annuity (annuitant)a series of regular periodical payments for a fixed period
or during someone's life time.
Classification of Annuities: Annuities can be classified on the basis of
1) The
number of lives covered
1. Single
2. Joint
2) The beginning of the payment of annuity
1. Immediate annuity
2. Deferred annuity
3) Method of premium payment
1. Single premium
2. Regular instalment |
|
|
|