Insurance is a modern-day necessity. Each individual and family has to have a well-chalked out plan for their insurance to protect their loved ones in case a calamity strikes. Also, as critical as it is to have a good insurance policy, it is an equally tricky task to figure out which one. People are often seen struggling with the plethora of insurance policies available. Here are some tips to help you decide which policy will be best suited to you.

Many people are confused between life and term insurance plans. While life insurance covers the complete life of the covered individual, guaranteeing a fixed payment at the end of the policy period, term plans cover the individual only for a fixed duration. Life insurance is quite popular as it also acts as an investment and has considerable tax savings. But, there is no payment in case of term plan, even though it is much cheaper and does not cause financial setback to the client if he discontinues the plan within the term. Unit-Linked Insurance Plans (ULIP) is also popular as they provide both insurance and investment benefits. It is a flexible investment that can be optimised as per the needs of buyer, provided he knows basics of equity market.