Pocket Money - SEBI Investor Awareness Website - Securities and ...

7. Mr. Roshan Vesuwala: About 30 years old working professional. His familyincludes his wife, who is a homemaker and a 7-yearold daughter. Wants to ensure a financial security cover for his familyin situations like his accidential death.Mr. Eureka says: Get your life insured my friend!Mr. Eureka’s assistant explains:____Insurance is protection against financial risk for payment ofa fee. Life insurance enables a person to meet liabilities incase of unforeseen circumstances leading to stoppage of incomedue to death or disability. One has to pay a fixed sum of moneyevery month/year and this fixed sum is called premium.There are broadly three types of life insurance. Pure risk or Term Insurance - where the entire premiumgoes towards insurance Endowment policies - where the balance of the premiumafter providing for life risk is invested to create a fund(endowment) and repaid with or without profit after theperiod of insurance. Whole life policies - where the insured amount with accumulated funds is paid to the legal heir of the personinsured.Today almost every insurance company offer the facilityof Unit Linked Insurance Plan (ULIP) which combines thebenefit of Insurance and Mutual fund. It is just like anendowment policy where the investment is made in mutualfunds.76