If you are planning for insurance policy then always opt for more than one plan but don’t opt for too many as it create confusion.
Always try to buy a term plan. Term plans are most profitable if you start it early . A term plan offers high cover for low premium. In the case of death your dependent will get total sum but if you complete your total policy period and still alive then you will not get any maturity benefit.
Advantage given by companies on term plans:
Convertible option is providing by companies will enable you to covert your term plan to endowment plan or a whole life plan.
If you have taken a loan during the term of a policy, you can insure it. In the event of your death, the insurance company will take care of the pending loan amount.
You can increase the cover of your term plan. This means depending on your lifestyle changes you can increase the sum assured by five per cent every year. You can even decrease the cover by five per cent every year if you find yourself tied to other commitments like loans, monthly installments.
At the point of maturity of the plan, you can choose the ‘premium back’ feature. But these plans are more expensive compared to pure term plans.
You can also terminate your moneyback policy. A moneyback policy is more expensive and you would probably just get back the premiums paid. Since a moneyback policy pays you at intervals and maturity benefits at the end of policy term, it may look like an attractive option to you. But if you get down to the nitty-gritty it has no real value for money!
Unit linked insurance plans give you many different options to choose.Traditional pension plans will give you guaranteed returns compared to Unit Linked Insurance Plan (ULIP). If you choose to invest in equity ULIP, it promises better returns if you remain invested for a long time.Traditional pension plans that assure guaranteed returns are not in the control of the policyholder, as the company invests the money according to their investment strategies. That is, they may invest either in debt or in a mix of debt and equity, but as a policyholder you cannot choose the asset class. However, in the case of ULIPs, the policyholder gets to choose the funds he wishes to invest in, which if done judiciously, can yield higher returns.In a unit linked pension plan, the returns are passed on to the dependents in the event of the death of the policyholder.