Last Updated:July 05, 2025, 13:50 IST
Endowment plans and ULIPs are among the types of life insurance plans that offer the dual benefit of insurance coverage and wealth accumulation.
Check best life insurance plans with an investment component. (Representative Image)
Life insurance is a critical tool to provide financial security against unforeseen circumstances. It provides a certain amount of money to the designated beneficiaries upon the death of the insured person. Life insurance plans are primarily designed to offer financial protection to the families of policyholders in case of the untimely demise.
There are many insurance plans that also offer the dual benefit of insurance coverage and savings options. Apart from enjoying the insurance coverage for the policy period, the policyholders can also get a lump sum amount on maturity asa survival benefit, under such policies.
Endowment plans and ULIPs are among the types of life insurance plans that offer the dual benefit of insurance coverage and wealth accumulation.
Five Life Insurance Plans With Savings Options
1. Endowment Plans
Endowment plans combine life insurance with a savings component. These plans pay a lump sum either on the policyholder’s death during the policy term or at maturity if the policyholder survives.
A portion of the premium is allocated to a savings or investment fund, which grows over time.
2. Unit-Linked Insurance Plans (ULIPs)
ULIPs are market-linked insurance schemes that combine life insurance with investment opportunities. A portion of the premium is used for life cover, while the rest is invested in market-linked schemes.
ULIPs are primarily investment-oriented, with the potential for higher returns compared to endowment plans. Those who are willing to take some risks while getting financial coverage can consider investing in ULIPs.
3. Whole Life Insurance Plans
Whole life insurance provides coverage for the policyholder’s entire life. Unlike term plans, there is no fixed term and the policy remains active until the policyholder’s death.
It is good for those seeking lifelong protection with modest savings. It is also possible to take a loan against a whole life insurance plan.
4. Child Plans
Child plans are meant to secure a child’s future. It can cover expenses like education or marriage. These plans often combine insurance for the parent with a savings option. The payout amount could be received as a lump sum or in instalments.
5. Money-Back Plans
Money-back plans pay a percentage of the sum assured periodically during the policy term. If the policyholder survives the term, they receive a lump sum amount plus bonus, if any. These plans provide periodic payouts, acting as a savings tool while ensuring life cover.
To conclude, life insurance plans can be used to ensure financial protection as well as generate returns. It is important to evaluate your financial goals to decide which insurance plan suits you the best.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
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