The different types of life insurance policies are explained as follows:

(1) Whole Life Policy : Under this policy, whole life of a person is insured and that he is required to pay premium up to his death. The policy holder (assured) cannot get any benefits i.e. money from insurance policy till he is alive. After his death, the amount of the policy is paid to his nominee or to the legal heir. Such a policy is meant for making a provision for the dependents of the assured. The rate of premium is usually low.

(2) Endowment Insurance Policy : An endowment insurance policy is for a specific period and the amount of such a policy along with bonus is paid after the maturity to the assured himself or on the death of the assured to the nominee or his dependents whichever is earlier.

(3) Term Insurance Policy : This type of policy is issued for a specific period. Premium is very low, fixed and remains unchanged during the term of the policy. In case of untimely death of assured, the nominee or dependents are paid the benefit amount mentioned in the insurance policy.

(4) Annuity Policy : Under this policy, insured has to pay the premium in lump sum or in instalments over certain number of years. After that, a certain amount is paid to the assured ; regularly on monthly basis for fix period or up to his death. It is similar to pension payment scheme.

(5) Money back Policy : Under this policy, the policyholder is paid regular or pre-determined percentage of the sum assured after every 10 years or 5 years during life time of policy and also provided the benefit of full sum assured to the nominee or dependents in the event of untimely death of the assured. Usually money back policy is available for 12 years, 15 years, 20 years, 25 years, etc.