What to Check when Looking for the best term insurance plan for 1 crore

Charlotte Miller

Updated on:

The best term insurance plan for 1 crore provides a death benefit of Rs. 1 crore to the nominee or policy beneficiary if the policyholder dies during the active policy term. This aspect helps to ensure that the insured’s family’s financial needs, such as paying outstanding debts, covering daily living expenses, and funding milestones and goals, such as children’s higher education or marriage, are met even in the absence of the insured.

That said, let’s discuss more about the 1 crore term insurance plan and what to look for when buying one.

Who Should Opt for the Best 1 Crore Term Insurance Policy?

These individuals should consider getting the best term insurance plan for 1 crore in India –

Young Individual:

Young individuals in their 20s and early 30s who have just started to work should consider getting a term life insurance policy. This is because they have the opportunity to purchase a policy with a large sum assured and long-term at a much lower premium.

Sole breadwinner of the family:

As the sole breadwinner of a family, the individual should consider purchasing the best term insurance policy for 1 crore to ensure their loved ones can financially support their needs and remain independent, and their children’s education needs are met in the event of their untimely passing.

Those who have multiple dependents:

Individuals, who have multiple dependents, such as parents, young kids, or in-laws, a 1 crore term insurance plan can help secure their future. Such a substantial amount can help the insured’s family to continue leading a financially independent life even in the event of their passing.

Those with outstanding debts:

Individuals with outstanding loans and debts in their name should consider getting the best term insurance plan for 1 crore. The death benefit of such an insurance plan can help the insured’s family to repay their outstanding debts and ongoing loans in their absence.

Why Should You Get a Term Insurance for 1 Crore?

One can consider a term insurance for 1 crore for these reasons –

Comprehensive coverage

Many insurers extend a life stage monetary benefit, which helps individuals to increase their insurance coverage at times of major milestones or life stages, such as when getting married, having kids, or purchasing a new house, without undergoing a new medical exam or checkup. Individuals can pay an additional premium to extend their coverage. However, individuals who opt for a 1 Crore term insurance plan right from the beginning are better equipped to account for these milestones and adapt to the changes without the need for increasing policy premiums at different life stage benefits, protecting their liabilities.

Long Term Protection

Today, some 1-crore term insurance plans provide the policyholder with lifelong coverage, say till they are 99 or 100, which means that their family will avail of the insurance death benefit if they die at any age before their term insurance policy expires. This feature could help the insured’s family maintain their existing standard of living and remain financially stable even after the policyholder’s death.

Rider Benefits

The best term insurance plan for 1 crore offers riders or add-ons that allow individuals to enhance their coverage in exchange for a nominal premium. These insurance riders can provide individuals coverage against terminal illnesses, critical illnesses, accidental death, total or partial disability, hospitalization expenses, and premium waivers. When an individual avails of accident insurance or critical illness riders, they have to pay an extra premium, which gets added to their base premium.

Tax Benefits

A 1 crore term insurance can help individuals save money on their annual taxes by allowing them to claim a deduction for the premiums they pay in a year. This tax deduction is available under Sections 80C and 10(10D) of the Indian Income Tax Act. Under Section 80C, taxpayers can claim a tax deduction for a maximum of Rs.1.5 lakh annually for the premiums they pay for various tax-saving investment options, including term life insurance. Under section 10(10D), individuals can claim a tax deduction for the insurance premiums they pay towards health insurance policies, which includes term insurance plans offering riders for disability or critical illness.

How to Select the Best Term Insurance Plan for 1 Crore?

Getting the best term insurance plan for 1 crore is crucial to secure the policyholder’s family’s future. However, to make the most of the plan it is important to select the policy after careful consideration.

Here are a few tips to do the same –

Assess financial needs and additional requirements:

Consider the insured’s family’s needs and their annual income when looking for a term life insurance policy, as the payout from the plan will replace their income in the event of the policyholder’s sudden death. Also, they should consider additional financial obligations, such as ongoing loans or debts, that their family may inherit if the insured is no longer there to extend financial support to them.

Find out and compare the Premium rates of Rs. 1 crore policies

If the insurance premium is too high, individuals might not be able to afford a term insurance policy or pay for the plan regularly. Therefore, it is vital to pick a term insurance policy that comes with an affordable premium amount, which fits their budget.

Factor in inflation rates and rising cost of living:

When choosing a comprehensive term insurance policy, it is vital to consider the multifaceted impact of inflation. The cost of living in India is constantly soaring, so getting a term insurance plan for 1 crore may be sufficient today and could help meet family’s needs and requirements in the future.

However, to account for inflation and rising expenses, individuals should look for a comprehensive term insurance policy that allows them to raise their sum assured later. This will help them to financially protect their family and help them account for costs with ease.

In addition, when choosing the best term insurance plan for 1 crore, make sure to compare the premiums of different plans, coverage, exclusion, riders, and claim settlement ratio. Having an idea about these will help individuals find the best insurance plan for their needs and help build a safety net for their families.