FAQ - Term Insurance

Q.
What is the difference between a Term Plan, Endowment Plan & ULIP?
Ans

Let us understand the difference between Term Plan, Endowment Plan & ULIP:-

Category

Term Insurance

Endowment Plan

ULIPs

Definition

Term Insurance plans provide protection to the insured for a specified term during the policy period.

Endowment Plan provides protection to the insured along with an investment opportunity.

ULIP’s combines the characteristics of a mutual fund and life insurance product under a single policy. It gives the flexibility to invest in different funds. 

Premium (1 Cr)

Approx. Rs. 9000

Approx. Rs. 65,000

Depends on the Plan chosen

Max. Sum Assured

No Limit

No Limit

No Limit

Premium Payment Option

Offer Single Pay, monthly, quarterly, half-yearly, yearly and limited pay options

Offer Single Pay, monthly, quarterly, half-yearly, yearly and limited pay options

Offer Single Pay, monthly, quarterly, half-yearly, yearly and limited pay options

Maturity Benefit

No Maturity Benefit unless the insured has chosen TROP Plan

At the time of maturity, the insured will get the sum assured plus bonus, if applicable in the plan.

At the time of maturity, the insured can redeem the units which are collected at the then prevailing unit prices. Some plans also offer loyalty or additional units either annually or at the time of maturity.

Choice of Risk Exposure

No option is given to the Policyholder to alter their exposure to risk.

No option is given to Policyholder to alter their exposure to risk.

There is risk involved as the premium is invested in different types of funds (Like Equity, Debt, Money markets, Hybrid, etc.) & also provides the option to switch between the funds.

Transparency

No Transparency on cost.

No Option to track your individual portfolio as the premiums are invested in a common with profit fund. 

This allows you to keep a track of your portfolio, regular intimation regarding the percentage of the premium that is invested along with the charges levied. 

Determining whether to invest in a Traditional Term Plan, Endowment Plan or a ULIP is not an easy task. It is best to leave such decisions to an expert. Our experts will analyse your risk profile, check your current financial conditions & make you understand the nitty-gritty's of various financial instruments. If you wish to know more about the various Products & Services we offer please contact our Experts at - 022-66700045/ Email Id: customersupport@beeinsured.com.

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