Life Insurance Plans – Traditional Vs Modern

Who can see the future – neither you nor I? This has made a fear space in youth’s mind now and therefore, awakened them to invest in life insurance. A couple of years ago, people were not so aware of insuring their lives against unknown and unforeseen incidents but now with the passage of time when every step of life has become volatile and unguaranteed, the youth has started realizing the importance of protecting their families against unanticipated situations with life Insurance Plans In India.


Life insurance is essentially a pact between the insured and insurer wherein the latter protects the former against financial loss, resulted from the premature death. The death benefit is paid in consideration for premium payments made by the insured.

Now, this mode of assurance has witnessed a paradigm shift, especially since 2000 when the insurance industry was liberalized. From one player market to 24 in 13 years has itself established the fact that how the industry has had a rapid growth along with the extent of growth moderation and intensifying competition.

India’s life insurance industry is the biggest in the world now with about 360 million policies and is expected to increase by 12%-15% over the next five years. In fact, today, life insurance is not just a form of protection against untimely and unfortunate incidents but an active form of investment in the equity market also.

Unlike the early days when people would buy conventional and traditional policies which were typically endowment or term policies are now trying their hands on modern plans as well. In case of the former i.e. the traditional insurance plans, the sum assured is fixed and guaranteed. They mostly offer insurance for life, health and sometimes even linked with pension paying scheme. Needless to say that this plan offers the most safety net to the investors except the fact that it yields lower returns against a long-term premium payment and is outdated owing to the spiraling cost of living.

So, a large number of people are turning to the modern plans backed by operational innovations and increased competition among the players. These modern plans can be customized vis-à-vis the insurers’ needs and offer a lot of flexibility in terms of premium, term, and riders. Moreover, these plans bring in a host of riders such as accidental death, critical illness, and premium waiver benefits.

It is worth saying that modern life insurance plans for India have transformed the industry and taken it to a whole new level. As soon as the innovative plans appeared in the market, the life insurance industry grew at jet speed. In FY2015-16, the life insurance industry recorded a new premium income of Rs. 1.38 trillion which indicates a growth rate of 22.5% and general insurance recorded 12% growth in terms of the premium on the other hand.

To conclude the fact, the life insurance industry in the country is set to grow significantly in the upcoming financial years in the country owing to the new, modern plans and investors are more likely to value the importance of the life insurance with each passing day.

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