Definition: Traditional insurance plans provide multiple benefits like risk cover, fixed income return, safety and tax benefit. Traditional Insurance plans are the oldest plans and cater to individuals with a low risk appetite.

Description: Traditional insurance policy plans provide the sum assured and a guaranteed or a vested bonus at maturity. These plans take a limited exposure in high risk equity and hence the downside probability is also low. These plans are suitable for the purpose of tax planning. Unlike ULIPs, premature withdrawal is normally not allowed in the case of traditional plans.