Q.Explain the main types of life insurance policies classified by duration and nature of benefit.

Policies by duration differ mainly in when the money is paid and how much protection versus saving they carry.

Classified by duration and nature of benefit, the main types are:

• Whole-life policy — the sum assured is payable only on death, whenever it occurs; premiums are paid throughout life or up to a fixed age. It gives maximum protection for the lowest premium and is meant to leave money for the family.
• Term (temporary) policy — cover for a fixed short period; the sum is paid only if death occurs within the term, nothing on survival. Being almost pure protection, the premium is very low — useful for a temporary need such as a loan period.
• Endowment policy — the sum assured is paid on death during the term or survival to maturity, whichever is earlier. It combines protection with saving, so money always comes back; the premium is higher because of the saving element. It is the most popular ordinary policy.
• Money-back policy — a form of endowment paying part of the sum at regular intervals during the term (survival benefits) and the full sum on death, with the balance on maturity. …

The classic mistake is confusing term and whole-life — term pays nothing on survival and covers only a short fixed period, whereas whole-life pays on death whenever it occ …