Concept of insurance and different types of plans:
1. Life risk cover i.e. financial protection to the family in case of an unforeseen event- say Death, Illness, Disability on account of Accident, etc is the main purpose of insurance.
2. It's also seen as a 'compulsory savings' leading to creation of wealth which can be utilized for education/marriage of children; for old age provision; for construction of house; etc.
3. Policies are taken to get exemption from Income Tax and to assign's these to financial institution's as collateral security while availing the different type of credit facilities including housing loan.
4. In order to the meet various socio-economic needs of different people. There are various types of policies plan available. Each has distinct features covering certain type of benefits. The selection depends on your needs.