Does Anyone Really Need 1-Crore Term Insurance? Find Out!
A term insurance plan designed by you having diverse options gives security to your family when you are not around. It is the best way to protect your assets even after death. It also provides policyholders with multiple benefits such as tax saving, saving bearing in mind inflation, and better return on premiums if compared with other traditional policies.
Other than these, your family gets financial support for their education, marriage, or health issues. Now when talking about a term plan of 1 crore rupees, it may sound very difficult to you. But in reality, it’s very much needed. Let’s first begin with the fact that Rs. 1 Crore is a large sum; this means more security than you could ever imagine.
When you take out a term insurance plan for 1 crore, it lets you know that your family and children are taken care of even after your demise with a giant corpus. Let’s take a look at some of the best benefits of Rs. 1 Crore Term insurance.
What is a Term Plan?
Term life insurance covers a policyholder for a specific amount of time. In case of death during the term, the company pays the death benefit to the beneficiary. One should know how much term insurance covers and what circumstances make it more valuable than permanent life insurance before buying some.
People take out life insurance to leave a nest egg for their estate and to provide financial security for their family, and term insurance caters to all these needs at quite an affordable price.
What Is a 1 Crore Term Plan?
1 crore term insurance is a type of simple and affordable life insurance plan that caters to the middle class. It provides a cover of Rs.1 crore, which is more than enough for most people. These plans are also regulated by the IRDAI (Insurance Regulatory and Development Authority of India) and their premium rates have been made affordable as per their directions.
Salient Benefits of Rs. 1 Crore Term Plan
Straightforward in Nature
A term insurance plan is easy to buy and manage, as you neither need to make investment choices nor worry about returns. You have to assess your expenses, determine a sum assured, select a term duration, and purchase your plan. Some online calculators are available that can help you in making these decisions as well.
Liberty To Reconsider Coverage
Another advantage of the 1 crore term plan is that the cover amount can be increased as you age. This can be done by increasing your sum assured. So, you can get a term plan early in life and increase the sum assured later on when you have more responsibilities. For example, once you get married, buy a house and have children, you will need more insurance to protect your family’s future financial security.
Value for Money
One of the major benefits of a term life insurance plan is its low cost. A term plan provides coverage for a specific period and has only one element—the death benefit. It does not have any cash value, which makes it far more affordable than other forms of life insurance. Term plans are the least expensive type of insurance policy as of now.
Flexible Payment Terms
Term insurance offers you flexibility. Like all things, there are many ways to pay your premiums. You can pay annually or every six months. Payments are made by check, money order, credit/debit card, or automatic bank drafts. Term life plans also allow you to choose a plan with cash value that can be used for any purpose.
Riders for Added Coverage
Choose from a set of riders to add to your policy. Riders are an optional add-on to your term insurance, which allows you to enhance the scope of your basic policy without having to spend much of your capital. Types of riders are Accidental death benefit, Accidental Total, and permanent disability rider, Critical Illness rider, Child support benefit, and more.
Protection Against Eventualities
A life insurance policy can help your family financially if you die. For example, if you buy a one-crore rupees term life insurance policy, then your family will receive 1 crore of rupees when you die. This will help them pay for things like food, shelter, and clothing without major financial compromises. They won’t have to depend on anyone to sustain a proper lifestyle.
More Coverage for Less
A term plan is an excellent value for money. It provides your loved ones with enough money to continue with life’s necessities, and it’s a more affordable option than other types of life insurance. Moreover, when you are getting coverage worth Rs. 1 Crore, you can stay assured that your loved ones won’t have to deal with any financial issues in your absence, no matter what.
Savings on Taxes
If you opt for a 1 Crore term insurance plan, you can claim tax deductions of up to Rs 1.5 lakh on the premium you have paid in the financial year under section 80C. You will also not be liable to pay taxes on the death benefit that is provided with the policy benefits. Keep in mind that these benefits are applicable only if you have opted for the old tax slab.
The main purpose of term insurance is to cover your immediate expenses in case of any unforeseen incidents. The money you get is yours, and it doesn’t have any retirement benefits attached to it. So while 1-crore looks like an exaggeration, it is needed in many cases where the investment amount is too high and the family prefers sticking to a premium that they can afford.
A good rule of thumb for purchasing a term plan is to go for a premium that you can easily pay each month and there should be no room for fluctuations. Avoiding unnecessary expenditure makes your life comfortable and one need not worry about financial contingency anymore; this much money is good to deal with life’s uncertainties.