What is Life Insurance Policy?

A life insurance policy is an agreement between an insurance company and a policyholder, where the life insurer promises to pay a fixed amount of money in return for a premium, after a set time period or upon the life assured’s death.

There are two simple types of life insurance policies:

  1. Pure Protection plan i.e., Term Insurance Plan
  2. Savings Plan

Pure Protection plans are specifically designed to protect the future of your family by providing a lump sum payment, in case of your absence. Whereas a savings plan is a financial product that helps in planning long-term goals like buying a home, fees for children’s higher education, and more while providing life coverage benefits.

Type of Life Insurance Policies in India:

  • Term InsuranceThe purest and most affordable type of life insurance plan that offers financial coverage to the policyholder against the fixed amount of premiums for a specific duration. In case of policyholder’s untimely death, their nominee receives the Cover Amount, as per the chosen policy.
  • Term Return of Premium (TROP)TROP(Term Return of Premium) is a variant of term insurance that provides an additional feature of Survival benefit. In addition to the life cover, if the policyholder survives the entire Policy Term, then all the premiums are paid back, excluding GST.
  • Whole life Insurance Under Whole Life Insurance, the policyholder is covered till the age of 100 years. If you want to leave a legacy for your family, and ensure that they are always financially covered, then Whole life Term Insurance is the best option for you.


  • Market Linked Systematic Investment Plan (ULIP)Unit linked investment plans (ULIPs) are unique market-linked life insurance plans that provide dual benefits of wealth creation through investments (in equity, debt or both) and a life insurance cover. High performing ULIPs have shown 15-20% returns (tax free), making it a popular choice for medium to long term investors.
  • Guaranteed Return Plan (Endowment Policy)A guaranteed high return with a life cover, is what an endowment plan offers. These are the preferred investment option for someone looking for a fixed lump sum as maturity after a specific duration. With a life cover benefit on death event and better returns than other fixed investment plans, makes these plans a must have inclusion in the investment portfolio.
  • Retirement PlansThese are long-term investment plans, which offer opportunities to get a stable post retirement income. During the investment period, a premium amount is paid at regular intervals which accumulates & grows. The maturity amount is then paid back post retirement based on the preference in-terms of lump sum or regular income.
  • Child PlanThese plans are designed to enable financial security for children where the returns on the investment helps fulfil a child’s future needs like education. Child plans specifically ensures these remain intact even in your absence by providing life cover to the nominee & funding the balance premiums through the insurer thus ensuring the a secured future of the child.

Comparison of Life Insurance Plans in India 2023:

ICICI iProtect Smart – View Policy Click Here

HDFC Click 2 Protect Super – View Policy Click Here

Max Life Smart Secure Plus – View Policy Click Here

TATA AIA Sampoorn Raksha Supreme – View Policy Click Here

Bajaj Smart Protect Goal – View Policy Click Here

PNB Met Life Mera Term Plan Plus – View Policy Click Here

Canara iSelect Smart 360 – View Policy Click Here

Kotak Life e-Term Plan – View Policy Click Here

How Does Life Insurance Work?

  • Let’s understand how life insurance plans work with the help of an example:
  • First, choose a life insurance plan that suits you the best. If you are married and have kids, a plan that promises a higher life coverage will be beneficial for your children’s higher education and their future.
  • Depending upon the terms and conditions of the plan, you can pay on either an annual or a monthly basis.
  • In case of an unforeseen death, the nominated individual should inform the life insurer and file a claim.
  • The nominee is required to submit some relevant documents such as a death certificate, identity proof, etc.
  • The insurer, after the verification, pays the life cover amount to the nominee.
  • Thus, the future of your family is protected with best life insurance policy and they can fulfill their dreams even after your absence.
Updated: April 16, 2023 — 7:20 pm

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