Business Tips and Insights

Insurance polices is a form of risk management that is primarily used to safe guard against the risk of potential financial loss. There are various types of insurance; life insurance being one of them which we’re going to deal in detail today. The risk may be of an event which is certain that is death. In that case, what will happen to the other members of the family who are dependent on a particular individual’s income? The other risk may be living too long in which an individual may become too old to earn i.e., retirement. In this case also, the earnings will decline or end. Mainly life insurance policy was established to protect against the uncertainty of life. But gradually its scope has widened and there are various types of insurance policies available to suit the requirements of an individual. To meet the needs of people the insurers have developed different types of products such as Whole Life Assurance, Endowment type plans, combination of Whole Life and Endowment type plans, Children’s Assurance plans and Annuity plans.

Whole Life Policy: In this kind of policy, the amount payable to the insured will not be paid before the death of the assured. The sum then becomes payable only to the beneficiaries or heir of the deceased.

Endowment Life Assurance Policy: The insurer (Insurance Company) undertakes to pay a specified sum when the insured attains a particular age or on his death which ever is earlier.

Annuity Policy: Under this policy, the assured sum or policy money is payable after the assured attains a certain age in monthly, quarterly, and half yearly or annual installments. Children’s Endowment Policy: The agreement states that a certain sum will be paid by the insurer when the children attain a particular age.