Introduction
Life can get very unpredictable sometimes. This unpredictability is more pronounced in the current times with the COVID-19 virus and pandemic. In such times, it is always good to know that you leave some financial backup for your family and loved ones.
Getting through the day-to-day expenses, providing your children with high-quality education, saving up for emergencies, and many other expenditures like this can get tricky for your family if you are absent.
In such situations, to help your family, it is advisable to consider insurance term plans. And what can be better than a 1cr term insurance? So let’s find out all about it.
What is 1cr Term Insurance?
Term insurance is a policy that ensures the beneficiaries or nominees of the policy get a sum of money if the insured person meets an untimely demise during the policy’s active term. In this case of a 1cr life cover, the insured person’s loved ones will receive Rs. 1crore if that person encounters a sudden passing.
During the April-August period in 2020, around 50% of all term policy buyers bought an insurance policy of 1cr and above. This is because the 1cr term insurance adds more cushion to your family’s financial needs. Apart from helping them during crucial stages in life, the 1cr term plan also aids them in paying off any current debts.
Begin Early with Your 1cr Term Plan
While the insurance plan is a 1cr life cover, many parameters vary. One such parameter is the premium amount. The Premium is the amount you pay to the insurance company in monthly, quarterly, half-yearly, or annual periods.
The premium amount varies according to your age, lifestyle (whether you drink or smoke), and health. Hence, it is best to get your 1cr term insurance as early as possible. The amount set when you buy your term plan stays the same throughout your life.
A few other features and insurance criteria that vary with the insurance providers are,
- Minimum entry age (generally, this is 18 years)
- Maximum entry age
- Maximum age of maturity
- Policy term
Rider Benefits on Your 1cr Life Cover
Apart from the obvious benefit of your loved ones getting an insured amount of Rs. 1 crore, there are other benefits to the term plan as well.
You can add rider benefits to your basic term plan. These rider benefits are like added points or areas that you can cover in your life insurance policy. Some of the most common rider benefits include,
- Death due to an accident
- Critical illness
- Terminal illness
- Premium amount waiver
- Return of premium
However, the different rider benefits offered also vary from one insurance provider to another.
How Do You Check if the 1 CR Term Insurance is Right for You?
There are many term plans like Rs. 5lakhs, 25lakhs, 50lakhs, 1cr, 5cr, 10cr, etc. So, how do you know which term insurance plan is best suited for your family?
Each family’s expenses and financial requirements are different. It depends on how many people there are in the family and how many family members have a steady income. Therefore, to calculate if the 1cr term plan is best for your loved ones, you must assess your savings, debt, major future expenses, etc.
Here is a basic formula that you can use to find if the 1cr life cover is enough for you and your family.
Term insurance value = Total family expenditure - Savings.
Where the total family expenditure = Family’s annual expenses till your retirement age (including inflation) + expenses on future goals (like child’s education, marriage) + debts or loans
Conclusion
The 1cr term insurance is a great plan that can help your family in the long term. It can also be very cost-effective for you in terms of the premium amount if you start early. But always ensure that you carefully and thoroughly read each point in your insurance policy to know what you are buying.
