Expert advice

Dec 03, 2013,16.53 IST

How do different life insurance policies differ?

There are different types of insurance products. You have term insurance product, you have endowment product, you have a money back product, you have a children's endowment product, you have a unit-linked insurance product. There are a whole plethora of products. You have retirement products also. The point is different people have different requirements. If you ask me personally I would probably take a term insurance which is essentially providing me the security that I want for my family and I will go for investing elsewhere into probably a basket of securities as far as my investments are concerned, but again requirements are different. So somebody maybe comfortable investing in a pension product as far as their long-term requirements are concerned. Somebody may want to pass on a legacy, so they may go for a whole life product where there life is protected and after their lifetime the legacy is passed on to the next of kin. Somebody may want money at regular intervals, so a money back product maybe suitable for somebody. So in all what you should look at is what is the benefit that you are seeking from the product, what kind of returns inherently the product can give, what kind of flexibility does the product provide and what kind of premium that you need to pay, once you evaluate all these things you go for the product that will best suit you.

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