What are the different types of Life Insurance? Explain the features of a Life Insurance Plan.

There are five main types of life insurance policies. Term Life Insurance: This policy offers a large sum of money assured to Nominee after death of the Insured at the cost of a nominal premium amount. However, this does not have any maturity value. Endowment Plans: This plan offers a lump sum amount of money at the end of the tenure of plan. Moreover, it gives a life cover until maturity. Money Back Plans: These plans provide with an opportunity to enjoy payouts at regular intervals (usually 5 to 10 years). These payouts are a certain percentage of the sum assured under plan. Unit Linked Investment Plans: This a hybrid product that can be understood as a mutual fund wrapped in a life insurance policy. While offering market-linked incentives, get the comfort of a life cover. Annuity/Pension Plans: This is popular among those investors who want to reap its benefits post-retirement when there is no regular source of income while the expenditure often witnesses an increase. These plans are of two types deferred and immediate. In a deferred annuity plan, start receiving regular income after a few years. On the other hand, immediate annuity plans offer a regular income immediately after the purchase of the plan. Life insurance is a financial contract which assures to provide the nominee of the policy taker a certain amount of money that has been determined in that individual policy, referred to as the sum assured. Insured need to pay a small amount of money to continue the policy, which is known as the premium. Premiums for an insurance plan depend on the age of an individual primarily. However, it is important to note here that even individuals of the same age might be charged a different premium because it is calculated on various parameters. Some of these parameters include family and medical history, coverage and term, lifestyle habits etc. Apart from giving life cover to the insured, one of the primary features of a life insurance contract is that it also provides maturity benefits.