Term insurance: This is a pure risk cover, in which there is no element of saving or investment. What this means is that your dependents will get the sum assured only if you die when the policy is still in force. If you survive the term, you get nothing.
Whole Life: This policy is an insurance cover against death, irrespective of when it happens. Under this plan, the policyholder pays regular premiums until his death or for a predefined period.
Endowment: This policy combines risk cover with financial savings. In this type of cover, the sum assured is payable even if the policyholder survives the policy term. If you die during the tenure of the cover, the insurer again has to pay the sum assured.
Money back: This is a sub-set of the endowment plan in the way it is structured. As a policyholder, you receive a portion of the sum assured at regular intervals, post which anything left is paid at the end of the policy period.
Pension: This policy works in two ways; one, it is an accumulation tool that collects premiums and earns a return. Two, on attaining the vesting age (the year the payout is to happen), the accumulated fund is paid back as an annuity.
Ulip: Unit-linked insurance plan or Ulip is a mix of insurance with investment. The asset allocation decision is left in your hands, as you can decide how to spread the investment across the available fund options with the Ulip.
Riders: These are additional benefits attached to the basic life insurance policy and are limited in size, relative to the base sum assured, and may have separate terms and conditions, possibly with additional exclusion clauses. Simply put, riders are options that allow you to enhance your insurance cover, qualitatively and quantitatively. Broadly, riders cover three aspects—critical illness, medical expenses and disability insurance. Different insurers might have different terms for these riders, but the categories covered are the same.
