The recent pandemic has made world realize the fragility of human life and how a suitable insurance policy is a necessity than a choice. If you have a family or there are people who depends on your financial support for their needs, then you must invest in an insurance policy that best suit your situation.
However, choosing the right insurance policy may become quite a daunting task since so many types of insurance plans available in the market. Therefore, it is important to a plan that not only fits your requirements but also offers the right features and fits your budget appropriately.
We can categorize the insurance policies in two different baskets - linked and non-linked insurance plans. As the name suggests, the linked insurance policies are the insurance plans that offer an insurance cover along with returns as dependent on the performance of the market. The most popular example of a linked insurance plan is Unit Linked Insurance Plan or ULIP plan. The non-linked plan is a traditional plan and is not linked to the movement in the market forces. This plan either offers only insurance coverage or provide insurance coverage along with returns. Here is more on the differences between linked and non-linked insurance plans:
Non-linked insurance policy
Non-linked insurance plans are traditional insurance plan the objective of which is to only offer comprehensive financial protection to your family in case of your unfortunate demise during the policy tenure. Non-linked insurance plans are not linked to the market, and hence, their returns are not based on how the market performs. These plans are low-risk plans that offer low returns and a well-defined death or maturity benefit. Some of the examples of non-linked insurance plans are term insurance, few saving plans, endowment policy, and money-back policy.
Linked insurance policy
Referred to as insurance-cum-investment plans, linked insurance policies are linked to the stock market, and their returns are based on how the market performs. In these plans, a part of the premiums is used to provide you with a secure insurance cover. The remainder of the premiums is invested in the market, in funds of your choice and as per your risk tolerance, investment horizon and financial objective. Linked insurance policy potentially offers high returns but also has a high element of risk, owing to the market volatility. The ULIP plan or Unit Linked Insurance Plan is the most common type of linked insurance plan.
What is your choice?
People who are risk-averse investors, they prefer to invest in a non-linked insurance plans. However, if you want high returns and can afford to take the risk, you should go for linked plans like Unit Linked Insurance Plans. To understand more, call us at 9818510748 or leave your contact info here https://www.gcservices.co.in/contact-us.php and one of our expert will call you and help you in choosing the right insurance plan for you!
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