With the ever-increasing cost of living, the expense of every household also increases. This means spending more and saving less. Such financial balance can cause problems for you and your loved ones during emergencies. To be able to provide financial protection from life risks to your loved ones, it is imperative for you to invest in a good term insurance plan.
In a term insurance policy, you will come across different types of coverage being provided. However, what if you wanted to buy the best term insurance plan for 1 crore? How do you look for one? Is it worth buying? Continue reading to understand more.
What is the meaning of term insurance?
Term insurance is a type of life insurance. In this insurance, the insurer agrees to pay your family, i.e., your dependents, with a sum assured if you were to pass away during the term of your policy. The amount that they would receive will help them stay financially stable and be protected from different life risks at any point of time.
What is a 1 crore term insurance?
As the name suggests, it’s a term insurance plan that has a coverage amount of Rs.1 crore. Generally, there are different amounts of coverage in term insurance that match needs of every policyholder. For some, a coverage amount of Rs 30 lakhs would be sufficient. For others, it could be Rs 50 lakhs. There is no one fixed coverage amount that is universally acceptable for everyone.
When you buy term insurance for yourself, the coverage amount you would select would be based on your life goals at that point in time. However, there is a chance that, at a later life stage, that coverage amount might be insufficient. In such situations, it might benefit you to opt for a larger cover amount, such as that of Rs. 1 crore.
What are the factors to consider?
If you plan to buy the best term insurance for 1 crore, here is a list of things you should look for in the plan:
- Premium
The cost of the policy should always be the main deciding factor. The higher the coverage of the policy, the more is the premium. This could discourage many from opting for a policy wi higher coverage. Many people relent when they realise the premium for such policies is costly. Look for a policy that has a reasonable premium rate. Even if the premium is a little higher than you expected, opt for a plan that has flexible payment options which might not dent your expenses.
- Tenure
The objective behind purchasing a long-term policy is for it to provide coverage to your dependents in your absence. If you opt for a short-term policy with higher coverage, it would be a loss for you in two ways. You would end up spending a lot in premiums, and if you were to survive the term, there would be no maturity benefits in the end. This means the loss of a huge amount of money. Look for a policy that has a longer tenure than your average policy.
- Tax benefits
Considering the premium and the sum assured of such a policy, greater tax benefits would be something to watch out for. Look for the limit of premium amount that is tax-deductible under Section 80C of the Income Tax Act. Also, make sure that the sum assured of the policy is also tax-deductible.
Should you opt for this plan?
As mentioned above, when you plan on purchasing term insurance, you should opt for a plan that offers enough coverage which negates the need for another policy. A policy with a coverage of Rs. 1 crore would be sufficient enough to cover your dependents in your absence. The amount would also help clear any outstanding loans or debts that might fall on your family.
To know more term insurance benefits about this plan and similar plans like this, you can get in touch with your insurance advisor.
