ULIPs have been seeing a decline in their share of new policies issued, for the last two years. This is due to a gradual & steady increase in the volumes of traditional insurance products like - term plans, endownment policies, money back plans & retirement plans.

With new & rigourous IRDA guidelines on ULIPs, agents have also started re-focusing on the traditional plans as the incentives are not capped here.
For the insurance companies also, a higher share of traditional plans gives a healthier portfolio and a higher valuation.

In the past the buoyant economy & stock markets provided insurance companies an easy tool to ride the wave- in the form of ULIPs. But lately they have realised that long term predictability of premium inflow is a critical aspect of valuation.

Life Insurance Policies are of various types and a good understanding of their features is a must before you can figure out which product makes most sense for your specific need.

One way of classifying Life Insurance policies is based on how the premium is invested and (sum assured) returned back:

- Term Insurance
Term Insurance is a simple insurance plan that covers the life for a specific "term". Death benefit is paid only if the person dies within this covered period. Since its a no-frills product, it is also the cheapest amongst the Life Insurance Products.

- Unit linked Policy