Traditional life insurance plans are age old life insurance plans existing in market and most preferred life insurance plan segment in comparison to other life insurance plans. As the name rightly suggests, traditional life insurance has been in tradition since the life insurance startup in India. These plans provide the right set of benefit combination of both death benefit and maturity benefit.
Traditional life insurance is meant for individuals who need investment security along with the life security and this type of life insurance plan also helps to manage the interim financial expenses along with the assured life cover.
Types of Traditional life insurance plans that exists are:
Whole-life insurance plans:
Money back plans:
Guaranteed return plans:
Income benefit plans:
The most suitable and existing traditional plan is the Money back plan. We know that traditional life insurance plans provides assurance of maturity benefit however considering the fact that in case of any immediate emergency in our life, we fall short of finances especially if required in lumpsum, here Money back plan helps to cover the shortfall of suitable amount to a certain extent since certain % of sum assured is paid at interims which can saved or used at right time.
Traditional plans provide below benefits which helps us to assess the importance of traditional life insurance plans besides other plans:
Considering the low risk factor, traditional plans are most preferred over the unit linked life insurance plans. If we need to plan investment along with the life cover, then traditional plan is the right plan type to proceed ahead.
We need to consider the fact that premiums for traditional life insurance plans are quite high in comparison to term life insurance plans since traditional life insurance plan provides assurance of both maturity benefit and death benefit.
Hence, we should try to plan combination of traditional life insurance plan along with the pure term life insurance plans to handle requirement of both fixed secured amount on maturity of plan by way of traditional life insurance plans and assure higher life coverage amount in case of death by paying lower premium amount through pure term life insurance plans.
Best of Luck on your purchase of Life Insurance Policy!
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