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With a gazillion expenditures and life goals, you know life isn’t financially easy. Buying 1 crore term insurance can be your family’s saviour.
With a gazillion expenditures and numerous life goals, you know life isn’t financially easy. If it is not easy now when you are alive, imagine the financial catastrophe if someday something happens to you?
Ensuring financial security for your family is pivotal – it doesn’t matter if you are in the best of your health or not. You don’t know what life throws at you, so it’s a good idea to be prepared for it – financially.
Buying 1 crore term insurance can be your family’s saviour. It can provide your family financial cover of INR 1 crore against periodical premium payments in an event of your unfortunate demise.
So, if you are going through multiple insurance covers, and are planning on buying 1 crore term insurance, read this guide to acquaint yourself with the basics of 1 crore term insurance.
How Does 1 Crore Term Insurance Work?
1. You Decide the Premium Payment Intervals and the Term Period
When you are purchasing a 1 crore term insurance, there are numerous decisions to make. For starters, you have to decide the premium payment; you can choose to pay for premiums monthly, semi-annually or annually – whichever suits you the most.
Then comes the term period. You can consider the term period as the life of a 1 crore term insurance. Your family can only make the claim within this term period to get the sum assured. Ergo, you have to choose it wisely. You cannot go for a shorter-term period if you are young. A term period is best decided according to your age. The younger you are, the longer the period shall be, the older you are, the shorter the period shall be.
The minimum term period is usually 5 years, but it can go up to 65-75 years, or a lifetime, depending on the insurer you choose.
You Make the Purchase and Pay Regular Premiums
It’s easy with term insurance. You pay the premiums regularly to get the sum assured in case of your unfortunate demise. In case, there’s any default on premium payment, your term life insurance can be deemed void.
Benefits of 1 Crore Term Insurance
1. Meets the Requirements
The difference between term insurance and endowment plan is that the latter is a combination of investment and insurance instruments, while the former is just an insurance instrument. That said, a 1 crore term insurance is adequate for a family of 3-4, if you have moderate life savings to bear heavy expenses such as education fees and marriage costs. In case, all these expenses are not needed, and your family lives a moderate lifestyle, 1 crore term insurance is enough to meet the requirements.
2. Covers Inflation
Inflation never ceases. If you are paying INR 100 for a commodity, then it’s very likely that you’ll have to pay INR 1000 for it in the future. That said, the point remains that your life savings and term insurance coverage can lose value over time. So, it would be ideal to keep inflation into account when you are purchasing term life insurance. Always aim higher than your expenses. A 1 crore term life insurance would be a safer bet to manage your expenses and cope with the effects of inflation at the same time.
3. The Riders
Riders or add-ons are additional policy benefits that you can use on top of your base 1 crore term life insurance policy against an extra premium.
In simple words, since term insurance doesn’t function like health insurance, and cannot provide you financial security against hospitalization, riders can give you that to provide extra benefits.
Although most 1 crore term insurance policies offer you coverage against numerous critical illnesses upon diagnoses at no extra cost, some policies do not. In that case, you always have the option to buy critical illnesses riders to help with hospitalization bills at extra premiums.
That said, there are other different types of riders you can benefit from.
4. Tax Benefits
Premiums paid against life insurance or 1 crore term insurance policy come with tax benefits. Premiums paid in a year (less than INR 1,50,000) can be deducted while computing your taxes.
For instance: If you have paid 30,000 as a yearly premium for your term insurance policy, and your annual income is 7 lakh p.a. Then the tax will be calculated on (7,00,000- 30,000 = 6,70,000).
A Mini-Buying Guide Before You Make the Purchase:
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