Types of Life Insurance Policy In India

Let’s understand the types of life insurance plans in India 2026

What are the Types of Life Insurance Plans?

• Term life insurance

• Term Return of Premium Plan (TROP)

• Unit Linked Insurance Plan (ULIP)

• Endowment Plan

• Whole Life Insurance

• Money Back Policy

• Pension Plan

• Child Education Plan

What is Life Insurance?

A life insurance meaning is a financial tool that provides protection to your family members from various uncertainties such as the unforeseen death of the family’’s sole earner.

What are 9 Types of Life Insurance Policies In India 2026?

Life insurance plans can be classified broadly into whole life, term life insurance, ULIP i.e., Unit Linked Insurance Plan and more available in India 2026

Types of Life Insurance Plans: An Overview

Let's discuss the insurance products in detail to understand how to choose one of the types of life insurance plan in India

Term Life Insurance

Term life insurance is the most convenient and affordable form of life insurance plans in India. This type of life insurance plan in India that you can for a specific tenure of 10 years, 20 years, 30 years or more years. It provides death benefits to the nominee if the policyholder dies during the term. Term insurance is pocket-friendly compared to other life insurance because it helps protect, not save. Unlike policies with maturity benefits, term insurance only pays out if you pass away during the policy term. This simplicity keeps costs low and easily compare term plans, making it a cost-effective way to get high coverage.
But certain variants of term plans also offer payouts on maturity, like TROP (Term plan with return of premium) and 100% refund of premiums at no cost term insurance if the policyholder survives the policy term.
These types of life insurance policy also allow adding riders with the base plan, such as accidental death benefit or critical illness. These important term insurance riders provide you and your loved ones additional protection at a nominal premium paid along with the regular premiums.
Let’s make this easy to understand with the help of an example:
Raj, a 35-year-old software engineer, purchases a 20-year term life insurance plan with Rs. 1 Crore term insurance cover. If Raj passes away during the term, his family will receive the Rs. 1 Crore death benefit. However, no benefits are paid in regular term insurance if he survives the term.
Also Read: Term Insurance Benefits

Term Insurance with Return of Premium

Return of Premium Life Insurance is the term plan variant that offers a benefit amount to the nominee in case of the policyholder’s untimely death or provides the entire premiums paid at the end of the policy term as a maturity benefit.
Under this type of term insurance with return of premium plan, you can receive the entire premium amount you paid on outliving the policy term. Moreover, using an online term plan calculator, you can calculate the premiums easily for term insurance.
For example: Meera, a 30-year-old teacher, opts for a 15-year term insurance with a return of premium plan. She pays Rs. 20,000 annually excluding taxes. If she survives the 15-year term, she gets back all the premiums paid, totalling Rs. 3 lakhs (excluding taxes). Her beneficiaries receive the death benefit if she passes away during the term.
Also read: 7 factors to consider before buying life insurance.

Unit Linked Insurance Plans – ULIPs

ULIP plans provide the dual benefits of investment and insurance. It provides a life cover that offers financial security for your family members and builds wealth through market-linked returns from systematic investments. With this, you can invest your amount in different fund options depending on your risk appetite.
These types of life insurance policies come with a lock-in time of 5 years, and the amount can be invested in hybrid funds, equities, bonds, etc. They offer the option of fund-switching and partial withdrawals. They also provide wealthy boosters and loyalty additions that help generate more wealth.
For example: Kavita, a 29-year-old earning female, purchases a ULIP that combines life insurance with investment. Part of her premium goes towards a life cover, while the rest is invested in equity and debt funds. She can track her investment performance and make adjustments as needed.
*The insurer provides all savings as per the IRDAI-approved insurance plan.. Standard T&C Apply

Endowment Plans

An endowment plan is a type of life insurance that protects your life and helps you build wealth at the same time. You can get a lump sum payment when the plan ends with this plan. If the policyholder dies while the policy is still in effect, the beneficiary or nominee gets a payout.
Endowment plans are a good choice for people who want life insurance and guaranteed returns. You can also get bonuses with these plans, which are paid out in addition to the policy's life cover.
For example: Priya, a 28-year-old nurse, invests in a 20-year endowment plan with a sum assured of Rs. 25 lakhs. If Priya survives the policy term, she will receive Rs. 25 lakhs along with bonuses, if any. If she suffers an unfortunate death during the term, her family receives the death benefit.

Whole Life Insurance

Whole life insurance plan is a type of life insurance policy that provides you coverage for 99 or 100 years. In comparison to a short tenure of 10 to 30 years, the long coverage time of these plans ensures family protection for an extended time.
This plan is ideal for individuals who have financial dependents in old age. One of the main benefits of this plan is that it provides lifetime protection to the policyholder and leaves a financial corpus for their kids.
These plans offer financial stability. After paying premiums of 5 years, you receive a guaranteed income at maturity. In addition to this, the income received from this plan is free of taxes, subjected u/s 10(10D) of the total premium amount paid.
For example: Sanjay, a 40-year-old business owner, buys a whole life insurance policy with a Rs. 1 Crore death benefit. This policy covers him for his entire life, and upon his death, his beneficiaries receive the Rs 1 Crore cover amount, regardless of when he passes away.

Money Back Policy

A Money-Back Policy is a type of life insurance plan that offers a unique blend of insurance protection and periodic returns. Unlike traditional endowment policies that pay out only at the end of the term, a money-back plan provides regular payouts (known as survival benefits) throughout the policy duration. These payouts help meet your short-term financial needs while still ensuring comprehensive life cover.
These plans are specifically designed to meet the short-term financial goals. This policy provides survival benefits during the policy tenure. It gives you a percentage of the sum assured at regular intervals during your policy term. If you live beyond the term of these type of life insurance policy, you will receive the remaining portion of the corpus and the accrued bonus also at the end of the policy term.
However, in case of an unfortunate event before the full term of the insurance policy is over, the beneficiaries are entitled to receive the entire sum assured regardless of the number of installments paid out, and without any deductions.
Money-back policies also have a maturity benefit. So, you receive a lump sum payment at maturity that can be used to protect your future or help fulfill your family's dreams in case you outlive the policy term.
For example: Anil, a 32-year-old architect, buys a 20-year money back policy with a sum assured of Rs. 20 lakhs. Every five years, he receives 20% of the sum assured. If Anil survives the term, he also gets the remaining sum assured and bonuses. If he dies during the term, his family receives the assured sum.

Retirement/Pension Plans

Retirement plans are types of life insurance policies specifically designed to build a large corpus for your after-retirement days, helping you financially in your non-working years. These plans allow you to save and invest for a long tenure, thus providing the potential to collect a handsome amount.
Retirement plans provide insurance benefits with which you can ensure financial protection for your family members by investing in retirement plans. These plans offer a number of options to withdraw your money like lump sum payment, regular income, or a combination of lump sum and regular.
For example: Ramesh, a 45-year-old engineer, invests in a retirement plan that starts paying him a monthly pension from the age of 60. This ensures Ramesh has a steady income during his retirement years, providing financial security and independence.

Child Insurance Policy

A child insurance policy is a saving cum investment plan that is designed to meet your child’s future financial needs. In case of an unforeseen death where the life assured’s parent passes away during the policy tenure, child insurance plans can provide instant payout to cover the expenses of a child.
Child Insurance Policies allow your kids to have financial support to live their dreams and gives you the advantage to start investing in the children’s plan right from the time the child is born and provisions to withdraw the savings once the child reaches adulthood. Some child insurance policies do allow intermediate withdrawals at certain intervals.
For example: Sunil, a 35-year-old banker, buys a child insurance policy for his 5-year-old daughter. This policy ensures that if Sunil passes away, the sum assured is paid out, and the policy continues with future premiums waived. Upon maturity, his daughter receives a lump sum for her education or marriage.

Tax Benefits on Types of Life Insurance

The main benefit of life insurance plans in India is the tax breaks they give you, which are based on certain rules in the Income Tax Act of 1961. Here are some of the tax benefits of life insurance:

Section 80C

According to Section 80C of the Income Tax Act of 1961, you will get a tax break based on the premiums you pay for a life insurance policy. In a single financial year, you can deduct up to Rs. 1.5 lakhs from your taxes.

Section 80D

Section 80D lets you deduct the premiums you paid for critical illness riders on your policy. Section 10: The benefit of maturity, which is received at the end of the policy term, is not subject to taxes under this section.

Tax deductions allowed for premiums paid towards critical illness riders in the policy.

Section 10(10D)

The maturity benefit received at the end of the policy term is free from taxes under this section.

How do you Choose the Right Type of Life Insurance Policies In India?

Here is how you can select the suitable types of life insurance policy for yourself:

• Choose as per your goals: Different life insurance plans can help achieve different goals. You should always be clear about the goal that you want to fulfill with your life insurance which can help you choose the suitable types of life insurance policy.

• Consider the Life Cover (Sum Assured): Determine the needs of your loved ones as well as your daily expenses before selecting a cover that helps fulfill all of your and your family’s needs. The general thumb’s rule is that you should always choose a sum assured that is at least 10 to 15 times your yearly income. You can also use a human life value calculator to see the life cover amount you can purchase.

• Policy Term: Various life insurance policies are available in India with different policy terms. You should select a plan with a suitable policy term that will help you achieve your desired life goals.

• Available Riders: Most types of life insurance policies offer the option of adding riders to the base plan. These riders enhance your sum assured and cover and are catered to the following:

• Accidental disability

• Terminal illness

• Waiver of premiums,

• Critical illness and

• Accidental death.

• Check Insurer’s Details: Before selecting the ideal type of life insurance policy, check the company's claim settlement, solvency ratio, customer service, and plan exclusions.

• Consultation: If you have any doubts, consult a financial advisor for additional information and advice on the best types of life insurance policies for you and your family.

Important Points to Consider Before Buying a Life Insurance Plan

Before purchasing life insurance coverage, it is essential to consider several key points. A good plan is not just about paying less and getting more, but also about how well the plan matches the current and future financial situation of the person buying the coverage.

• Analyze your financial objectives and protection requirements
  To begin, it is important that you know what your reasons are for buying life insurance. Your income, loan, monthly expenditures, dependents, and future plans, like children's education and retirement, would help you assess your future goals.

• Select the appropriate type of life insurance
  Various plans have different uses. Term plans, for instance, come solely for the idea of protection, whereas whole life, endowment, and ULIP plans come with both saving and protection/investment offerings. Choose the plan that best matches your protection requirements and risk tolerance.

• Decide the policy term carefully
  A good policy term should be the time your family is most reliant on your financial support. In an ideal situation, your coverage should last until when your major financial obligations such as buying your house or your children’s education, are sorted.

• Ensure the premiums' affordability and flexibility
  Select a premium amount that fits comfortably within your budget. Furthermore, check if the insurer offers flexible payment terms, including monthly, quarterly, or yearly payment options for the premium.

• Think about adding riders for additional protection
  Riders such as Critical Illness, Accidental Death Benefit, and Waiver of Premium can be added to make your plan better. These riders help you in different ways when you are in certain situations.

• Try to find the flexible plans
  Certain life insurance policies allow you the flexibility of raising the coverage level, changing policy forms, and even adding benefits at a later date. Such benefits prove helpful as your earning levels and liabilities keep changing.

How to Buy the Best Type of Life Insurance Plan from Policybazaar?

You can buy the best type of life insurance policy in India online from the comfort of your home using the following steps:

• Step 1: Go to the Policybazaar’s homepage and visit Life Insurance

• Step 2: Select the type of life insurance at the top (Term/Investment Plan)

• Step 3: Enter your name, contact information, gender, and date of birth

• Step 4: Fill in your occupation type, annual income, educational background, and smoking habits

• Step 5: Select the best life insurance plan for yourself and proceed to pay

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