Basically there are 2 types of investment policy?

Endowment Policy	Investment linked policy
Endowment policy is designed to provide savings and protection to you and your family	An investment-linked policy is a combination of investment and protection.
Participating policies: The amount received at maturity is not guaranteed as it is invested in insurance fund	An investment-linked policy will allow you to choose the types of funds you are interested in. The investment can be in any of higher, medium or lower funds
Non participating policies: In this the amount received at maturity is guaranteed because the policy doesnot participate in insurance fund.	As your income increases you can easily top up your premium.

The four simple steps to determine the coverage you need for your child education plan is:

1. Expected living expense on your child
2. Inflation rate generally offered by company
3. The number of years of goal (18 years and above)
4. What is the current course fees for your child education.

(Current annual course fees + Expected living expense)*no. of years to achive goal= Present total cost.
As the cost is going to occur in future, you need to account for inflation i.e inflation factor * present total cost= Total cost in future.

Thus finally, annual premium = Total cost in future/ Recurring factor.
Note* Recurring factor and inflation factor varies from companies to companies.

 

These are some risk not covered under the policy

1. Nothing will be payable to a nominee if insured commits suicide within a period of one year, from the date of issue or reinstatement of policy.
2. If the insured has not mentioned any important facts related to health, at time of entering the contract.

	Death claim	Maturity benefit
	Nominee should do	Insured must do
Step 1	Notify your insurance company.	You need to inform your insurance company
Step 2	Submit claim form along with policy original documents and the dealth certificate.	Submit claim form or discharge form along with supporting documents as required by the insurance company one monthe before the maturity date.
Step 3	Nominee would receive a claim within 1-4 months if the paper work is proper	Once the case get approved insured would be informed through mail.

Death benefit paid to nominee and maturity benefit both are tax free.

 

Grace period
If payment for your monthly premium is pass due, a grace period of 15 days will be given for you to settle your payment. For other frequency of payments such as semi-annually or annually, the grace period is 30 days. If payment is still not made within the grace period, your policy may lapse or be subject to reduced paid-up or automatic premium loans.

Free Look
It is time period within which you can cancel your life insurance policy by returning all the policy documents to your insurance company. It basically varies from 10-15 days in all insurance companies.

Bonus:
This is the extra money paid by the insurance company at the time of maturity. However bonuses are not guaranteed and depend on the performance of the insurance fund

Reduced paid-up If your policy has acquired a cash value, you can choose to stop paying future premiums. This would still continue your policy but the sum assured will reduce.

Automatic premium loan Some life insurance companies will automatically advance to you the premium amount when you do not pay your premium within the grace period on condition that your policy has sufficient cash value. However, you will be charged interest on the outstanding amount of your premium loan.