Types of Life Assurance Policy

Whole Life Policy

This policy covers the whole life of the insured person. The assured amount is payable only after the death of such comparatively lower and are paid throughout life for a specific period. This policy is useful to provide protection to the family. It is also named a straight life policy.

Term Policy

This is the oldest type of policy which is issued for a fixed period of time. If the assured person dies within the specified period the insurance company has to pay the face value of the policy to the beneficiary. In case he survives this period he gets nothing. This is the cheapest form of policy but its scope is very limited.

Last Survivor Ship Policy

This policy is one under which the sum insured is payable on the death of the last survivor. The sum insured is not paid if one person dies before another. This policy may be issued for three or more lives.

Endowment Policy

This policy is written for a fixed number of years. The sum assured to be paid either on death or after the expiry of the fixed period whichever comes first. This is the most popular type of life insurance which is particularly suitable for the family men in the event of his premature death. This type of policy may be classified into three following forms.

Pure Endowment Policy

Under this policy the insured amount will be paid only to the assured in the event of his surviving a stated period. No benefit will be payable if he dies before the maturity of the policy.

Pure Endowment Policy

In this form of endowment policy the amount of premium will be returnable to the legal representative of the assured if he dies during the policy term-

Double Endowment Policy

Under this device of insurance double of the insured amount becomes payable if the policyholder attains a specific age. But if he dies earlier only the assured sum is payable to his or her heirs.

Convertible Term Policy

This policy may be converted into a whole life or endowment policy. This option must be exercise within a particular period. This type of policy is very useful to the person who has family responsibilities in the early years, when financial resources may be limited.

Group Life Assurance Policies

These policies are required by the employers with a view to providing life assurance for their employees on a collective basis. These are generally issued without medical examination of the persons concerned and are very useful “fringe benefit” for employees.

Family Protection Policy

This is a very suitable policy for the family man. It is issued for a specific period. According to its term insured dies before the stated time, amount becomes payable monthly or quarterly to the family of insured till specific period. But the sum assured is paid at the end of said period. If the insured survives the particular number of year&, he gets only the assured sum on the maturity of the policy.

Policy Upon the Lives of Children

There are two forms of children’s lives policy.

Children’s Deferred Policy

This policy is taken by the parent for a fixed period. This may be terminated when the child dies before the specific age the amount of premium becomes returnable to the parent. If the parent dies before the option date, no further premium

Educational Policy

Parents may insure the lives of their children with the object of providing funds for school college or university fees and other educational expenses.


Any contract under which a periodic payment is made by a life assurance company to an annuitant is known as an annuity. This is a form of pension which is payable periodically during the life of an. annuitant. But he has to pay a lump sum in advance to an insurance company in exchange for an annuity.

With profit & Without Profit Policy

A person who takes with profit policy is entitled to participate in the profits of the company but he has to pay higher rate of premium.

Industrial Life Assurance Policy

This type of policy was introduced in the society in order to remove the insurance difficulties of poor group. It is generally taken by the industrial workers who makes the payment of premium weekly or fortnightly. Under this policy the rate of premium is very low and it is collected form the policyholders near to their home.

Joint Life Policy

This type of policy is purchased jointly by two or more persons. Under its term the sum assured becomes payable to the survivor at the death of first partner. Such policy may be effected on the joint lives of husband and wife or two or more partners of firm.

Sinking Fund Policy

This policy is suitable for joint stock company to arrange sufficient funds on certain date for the repayment of Debentures or for replacement of wasting assets. Such policy is not effected by the death of assured person but it may be continued by legal representative of the deceased policy holders.

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