Whenever you think of opting for Life Insurance Policies, the general image or idea that flashes on your mind is that of a salesman trying to entice to purchase a policy under his company name. Now if you are a completely new customer and have no idea as to what kind of deal suits your need, you end up making the wrong policy. Life insurance is also used to pay death taxes and estate settlement costs, to shift wealth from one generation to another or to benefit selected charities.. Most people go in for a life insurance policy to ensure that upon his/her death, the beneficiary is financially secured. Life insurance policies are typically divided into two major types: term insurance and permanent insurance. From these two basic policies, the insurance industry has developed a number of products using the same essential principals. People on a general basis would consider a life insurance policy to have no time limits, which always isn’t the case. Lets discuss the two types of life insurance policies in detail.

Term Life Insurance: A term life insurance policy pays the beneficiary or the nominee the due amount only if the insured individual expires during the time/ tenure of the policy. No benefits are paid if the insured exists beyond the term of the policy and there is no investment or cash value feature inherent in this type of policy. For this reason, term insurance policies will carry the lowest premiums in the earlier years of the policy. However, as an individual gets older, term insurance gets more expensive. A major problem with term insurance is that with the expiry of the insurance policy, the insured would need to replace or renew the policy at a higher premium.

Permanent Life Insurance: A permanent life insurance policy, often referred to as whole life insurance, is intended to provide protection throughout the life of the insured. It is an alternative to term life insurance and the premium is a bit costlier too. This is done to maintain the premium level while the policy is in place. Moreover as the insured keeps getting older the mortality rates increases. A couple of permanent life insurance policies are the universal life insurance policy and variable life insurance policy. A universal life insurance policy provides flexibility for the insured by allowing the individual to select the premium they would like to pay. Variable life insurance is a policy in which the insured has the ability to direct the investments of the cash surrender value to achieve potentially higher returns than could otherwise be realized. If the investments perform well, the death benefit will increase.

Determining your need prior to choosing a policy is important. Insurance is basically done when you have young members in your family, there is one bread earner and insufficient savings to meet the demands of the survivors in case of a disaster. The type and amount of insurance which is being considered must also be predicated on the affordability of the premiums. A policy which is too expensive to carry may result in an early termination. The insured would then need to reapply, usually at higher costs, and potentially subject him or herself to a physical examination to determine overall health.
Going by the current premium values in the market the top 5 insurance companies would be ranked as

1) ICICI Prudential Life Insurance
2) Birla Sun Life Insurance
3) HDFC Standard Life Insurance
4) Life Insurance Corporate of India
5) Bharti-Axa Life India.

Life insurance is a very complex product and, yet, is essential for many individuals in order to protect their loved ones or meet the other needs for which it is being purchased. Insurance and premium adviser for India’s leading insurance company.