Life is unpredictable; therefore, it is important that you are always prepared. One of the essential things is to protect your loved ones financially in any adverse situation. A simple and effective way is to purchase a life insurance plan. It offers financial assistance to your dependents and a sigh of relief to you.
Out of the numerous plans available, a ₹1 crore term insurance plan has been a choice favourite among many. It provides a high level of cover for a comparatively reasonable cost, thus perfect for those who want to ensure their family’s financial well-being for years to come.
What is a ₹1 crore Term Insurance Plan?
Term insurance policies are becoming very popular, and a ₹1 crore plan is one of the most popular amongst the buyers of policies these days. Thus, a ₹1 crore term insurance policy is one where if the life insured passes away during the term of the policy, the death benefit in the form of a sum assured will be provided to the nominee or family as ₹1 crore.
This massive amount is intended to be used as a financial cushion, enabling the family to pay important expenses, repay loans, and undertake meaningful endeavours such as children’s education or home requirements.
The recurring premium is paid by the policyholder annually, quarterly, or monthly for the policy term. It also depends on age, lifestyle, medical history, and tenure chosen. By availing this coverage, one can guarantee that his/her family is financially independent even if he/she is not around to support them.
Why Buy a ₹1 crore Term Insurance Policy?
There are a number of reasons why a ₹1 crore policy is considered to be a wise financial choice.
1. Good Cover at Low Premiums
Term cover is one of the most inexpensive types of life cover. The optimum term insurance plan for 1 crore tends to be much less expensive than many expect, particularly for young buyers. For example, a healthy, non-smoker in her mid-twenties can afford such a policy for over a thousand rupees a month. Once one is chosen, the premium remains constant for the policy duration, thus facilitating future planning. An online cost estimator or premium calculator can be employed to calculate costs and ensure affordability before purchase.
2. Securing Debts and Responsibilities
The key purpose of a ₹1 crore term policy is to provide money when it is needed the most. The sum can be used to clear debts such as a home loan or personal loan, for child education, or simply to provide daily monetary support. Financial security cannot replace emotional loss, but financial safety can ease the pain and give the family some space to recover without immediately having to concern themselves with finances.
3. Broader Scope for Investments
Purchasing a high coverage early in life maintains premiums tolerably low. This frees more income to invest and save in other instruments, and it assists in wealth generation as well as protection and preservation. Postponement implies that the premium for the identical cover increases by leaps and bounds with age, and it proves to be stressful on budgets already spent on domestic outgo, educational charges, or pension plans. Early buying allows an easier integration of protection with investment.
4. Enhanced Safety with Riders
A ₹1 crore term policy does not have to reach its end with life cover alone. With the option of extra riders, the policyholder can extend the cover offered. A few of the everyday riders are critical illness cover, accidental death benefit, or disability cover. These are added to the policy, turning it into a larger safety net that offers relief against health or accident-related complications.
5. Tax Benefits
Another advantage of term insurance is the tax relief. The premiums are not taxable under prevailing tax rules. Under the previous tax regime, term insurance premiums can be claimed as a deduction under Section 80C* of the Income Tax Act, up to ₹1.5 lakh per year. The nominee gets a death claim that is free of tax under Section 10(10D). Additionally, premiums paid towards health-based riders such as critical illness cover can be availed of as deductions under Section 80D*, subject to some limits. These benefits lower total tax burdens without compromising the family’s coverage.
*These sections are present in the old tax regime.
Who Can Purchase a ₹1 crore Term Insurance Plan?
A ₹1 crore policy is not exclusive to high-income earners only. It is suited for a range of individuals, particularly dependents.
- Young professionals: Early booking ensures low premium payments and coverage in working ages.
- Married couples: Provides financial security for a partner as well as children, including domestic expenses and future aspirations.
- Home loan borrowers: Shields the family from the need to make loan repayments in the case of an untimely death.
- Parents: Provides support for children’s education and future needs.
- Business owners: Protect family interests through the provision of financial commitments against business undertakings.
Key Points to Recall Before Purchasing
Although the benefits are enormous, there are some points that need to be kept in mind while selecting the most suitable term insurance plan for 1 crore:
- Policy term: Select a term corresponding to your profession or until some age when major financial goals are met.
- Claim settlement ratio: Keep in mind that insurers like Axis Max Life Insurance have a good CSR to conveniently settle your family’s claims.
- Riders and add-ons: Select riders and add-ons based on your health and lifestyle.
- Revealing information: Always provide proper health and lifestyle information while buying to avoid later disputes at the time of claim.
Conclusion
A ₹1 crore term insurance plan is an excellent way of providing real financial security at low prices. It ensures that upon your death, your family can continue with the prompt payments, clear off the debts, and keep long-term plans intact without any hindrance.
By investing early, reading the policy terms carefully, and utilising tools such as an investment calculator to verify affordability, you can fund a robust security net, along with leaving room for other investments.