You buy term insurance to protect the financial future of your family members, in your absence. You want them to live a comfortable life and achieve their dreams and goals without having to worry about finances. They shouldn’t have to give up on what they want from life simply because of the lack of money.
Now, when you buy term insurance, you need to ensure that you choose a cover amount that will safely encompass the amount your family will need for their financial goals, whether it’s pursuing a degree abroad, buying a vehicle, settling sdebts, or just taking care of everyday living expenses. You can customise the cover amount according to their needs.
In this article, we’ll discuss 1 Crore Term Plans and how to know if this cover amount will be enough for you. Let’s go!
What is 1 Crore Term Insurance?
1 crore term insurance is basically a term insurance plan with a cover amount of Rs 1 crore. It is a contract between you and the insurance company, wherein the insurance company gives you risk coverage in exchange for the premiums you pay.
Calculate Your Life Insurance Premium
Benefits Available Under 1 Crore Term Insurance
This term plan offers a death benefit of Rs. 1 crore to your loved ones in case of your unfortunate death. You essentially create a financial cushion of Rs 1 crore for your family which they can use for their long-term goals, short-term expenses, and to pay off any debts - without compromising on their lifestyle - in your absence.
However, if you survive the policy term, you won't receive any maturity benefit.
1 Crore Term Insurance - Example
Anirudh is a 35-year-old married man with a kid. Both his spouse and kid are financially dependent on him. He has taken a personal loan of Rs 40 Lakhs and wishes to send his child to a prestigious university for an arts degree, which will cost around Rs 40-50 Lakhs. So, he invests in a 1 crore term insurance plan to keep his family financially protected. He appoints his spouse as the nominee.
If Anirudh dies during the policy term, his spouse will receive a death benefit of Rs 1 crore which she can use for daily expenses, repaying his personal loan, and her child’s education costs.
If he survives the policy term, he will not be eligible to receive anything.
How Can You Know If 1 Crore Term Insurance is Enough?
Everyone has different goals and obligations in life. Maybe you’re single, but have taken a student loan for your studies and its repayment burden will befall your parents if you pass away. Or you’re married and have a child for whom you want the best of everything, right from their school education to their wedding and career whether or not you’re around. Maybe you simply want a nice fund for your loved ones to fall back on in case they face any financial stresses in your absence.
A term insurance plan is a good way to ensure the financial security of your family when you aren’t around anymore. The money they’ll receive will continue to fuel their aspirations. And, to make sure this happens, you need to figure out the cover amount they’ll need. It should be enough to meet their goals and continue with their current lifestyle.
Coming to 1 crore terms plans. This cover amount may or may not be enough for your loved ones based on your and your family’s financial goals and needs. So, what you should do is jot down your family’s goals, liabilities, daily needs, etc. This includes big expenses like home loans and higher education/wedding costs as well as small expenses like grocery, utilities, rent, school fees, etc. Make sure the amount you choose suffices these expenses.
Note: Make sure you factor in the amount you own as well. This includes your assets and savings, which can lower the cover amount your family will need.
So, say you have a home loan of Rs 80 Lakhs and want to avoid shifting the repayment burden to your family if you pass away. A 1 crore term insurance plan will be comfortably sufficient. On the other hand, if you want to cover your child’s education and wedding, along with any loans you may have taken, etc. - you may need a larger cover amount.
Best Term Life Insurance Plans
Insurance is a personal purchase. You need to keep in mind that even if Rs 1 crore seems like a big amount, it may not always be so. You don’t want your loved ones to face any monetary shortage in your absence - so ensure you calculate and opt for the right term insurance cover amount.