1. On the basis of durability of policy:
According to the durability of life insurance policy, it can be classified into different types
I. Whole life policies:
This policy is issued for life. It means the policy amount will be made at the death of the life insured only The insured cannot get the policy amount during his life time.
II. Term insurance policies:
This policy is for a short period of years ranging from three months to seven years For those persons who need extra protection for short-term period or long-term period but unable to purchase due to low in case or health, it will be useful
III. Endowment policies:
This endowment policy can be divided into different parts They are as follows
- Pure endowment policy: The sum assured is payable on the life assured surviving the endowment term In the event of his death within the term, premium may be returnable or not In corporation, all premium paid without any deduction will be refunded too It grants protection against living too long while the term policy grant"? protection against living too short This can be issued in the life of adult as well as in the life of child. This is useful to the person who does not care to present himself for the medical examination.
- Ordinary endowment policies: This is the policy which actually represents the life insurance in true sense. It provides an ideal combination of both the family protection and the investment. It is taken out for specified terms of years» the sum assured being payable either on the life assured dies during the period or his survival to the end of the period. Premiums are payable throughout the term of the policy or to limited period or till the prior death of the life assured.
- Joint of endowment policy: This policy covers more than one life under single policy. Under this the sum assured is payable on the expire of the term or on the death of one of the assured lives during the endowment period. Premiums are payable throughout the endowment period or till the prior death of only one of the lives assured.
- Double endowment policy: Under this policy, if the life assured dies during the endowment period, the basic sum assured is payable and if he serves until end of the term, double of the sum assured is paid. Premiums are payable through the endowment term the prior death of the life insured.
- Fixed term (marriage) endowment policy: Under this policy, the sum assured is payable only at the end of stipulated periods but the premiums cease if death of the policy holder occurs earlier. This policy is designed to meet the requirement of family man who wants to make violable certain sum of marriage for female dependent.
- Educational annuity policy: The policy is taken out on the life of father or guardian who undergoes medical examination. The child for whose benefit policy is taken is called beneficiary.
- Triple benefit policy: This policy is the combination of whole life limited payment and pure endowment with guaranteed annual bonus payable on death during the endowment term.
- Anticipated endowment policy: This policy is similar to endowment assurance except that part of the sum assured is paid at certain internal before death within maturity of the policy and the balance of the sum assured is payable at maturity
IV. Survivorship policy:
There are two persons in this policy, first a named insured and another named person The sum assured is payable if the life assured dies before another specified person of counter life If the counter life dies, first nothing is payable and the contract ceases
(other basis of life insurance contract policies in next chapter)