What are the different kinds of life policies in India ?

Life policies are of various kinds .

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(i) “whole life policy”; in this, the sum fixed is payable on death alone.

(ii) “Endowment Policy”: in which the sum fixed is payable on attaining a particular age or on death before that date. Two risks are insured in such a policy. The premium is therefore higher. The above two kinds of policies may be with or without the benefit of bonus, i.e. a share of profit distributed annually.


(iii) Policy upon “joint lives”, e.g. partners: in such a case, the company pays a stated sum for loss of partner’s share in the partnership by death. The premium in such cases is generally paid out of the partnership assets.

(iv)“Annuities” :under such a policy , the amount is not payable in lump on death but is payable yearly in smaller sums.

(v) “Short term policy” is for a shorter period than life.

(vi) “Limited payment policy”: in this, payment of premium cases after a certain period.


(vii) “Ascending scale policy”: in this, the premium increases gradually.

(viii) “Sinking fund policy”:this is taken out by as company to pay off the debenture debts of the company. At the end of the period of the fund is payable.

(ix) “Indisputable policy”: Under such a policy, the insurers are stopped from avoiding the policy on any ground except fraud. Under sec. 45 of the Insurance Act, 1938, notice life policy can been called in question, after the lapse of two years, for misstatement except on the ground of fraud.

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