KEY TAKEAWAYS
- 1 crore term insurance provides a large financial safety net.
- Coverage should match income, expenses, and total liabilities.
- Inflation affects the future value of your term insurance plan.
- Affordable premiums are essential for policy sustainability and benefits.
As per the IRDAI, life insurance penetration in India was merely 3.2% in 2022, indicating a large gap in the financial preparedness of families in the country.
That’s why high-value life cover plans are important. The purpose of these plans is to create a large financial safety net for your family in the event of unforeseen circumstances, to allow them to remain financially stable in your absence.
In this article, we will explain the features, benefits, and disadvantages of a1 crore term insurance plan to help you determine if this is indeed suitable for your family’s needs.
Term insurance offers a cost-effective way to secure life coverage, featuring low premiums, flexible durations, and a substantial payout amount. This makes term insurance policies highly desirable for young professionals and single women in particular.
When choosing adequate coverage for your family, you need to evaluate the following factors:
The above factors affect how the death benefit is utilised by family members after your demise. By planning these factors carefully, you can ensure maximum term insurance benefits for single women, young professionals, primary wage earners, and more.
Limiting your spending improves financial planning, while adequate coverage ensures all your family’s needs are met. Below, you can see the major benefits of term insurance.
Money is a component that you can never have enough of. Whether you decide a 1 crore or 5 crore term plan, it often feels like the coverage might still fall short. However, based on the factors discussed above, you need to determine the sum assured that would help your family live comfortably without upsetting your financial plans today.
Let’s assume you purchase a 1 crore term insurance for 20 years as a single woman or young working professional. You need to assess all your obligations, including how many dependents rely on your income. You would have to weigh the term insurance benefits for single women and professionals against the benefits of other types of life insurance policies.
A 1 crore term insurance will pay your beneficiaries the death benefit of 1 crore. It is a huge amount of money that can help them set up their future. However, if your income is high, a ₹1 crore term insurance might fall short. You may need a larger sum assured to secure your loved ones’ future.
Here’s where it gets tricky.
Although a 1 crore term insurance plan is an affordable plan, the premium would still be higher than 30 lakhs or 50 lakhs plans. You need to check if it is affordable for you. Additionally, if the premium is high, it might exceed the limits set under various sections of the Income Tax Act. Term insurance benefits for single women or anyone in terms of tax benefits would no longer apply.
On the other hand, choosing a lower sum assured would mean a lower settlement for your family. If the amount is insufficient, they might struggle to manage existing liabilities. Therefore, it is important when deciding the sum assured, be it a 1 crore term insurance, higher, or lower, you need a customised plan that works for you.
Ans: A life insurance policy that offers your beneficiaries ₹1 crore (INR 10 million) in the event of your death within the policy term.
Ans: Young professionals, a single woman, or a primary earner with dependents and financial liabilities should consider an insurance policy with that level of coverage.
Ans: You need to look at your income, your liabilities, your dependents, and inflation, and decide if ₹1 crore will provide security for the future of your family.
