₹ 2 Crore
Term Insurance Plan
What is a ₹ 2 crore term insurance plan?
A ₹ 2 crore term insurance plan is an insurance tool that offers a life cover` of ₹ 2 crore to the policyholder’s family in the case of an unfortunate event during the policy period. Since ₹ 2 crore is a significant sum of money, the plan ensures the financial well-being and security of the insured person’s dependents in their absence.
A ₹ 2 crore term insurance plan can help individuals build a substantial financial safety net at a relatively low cost. This sum assured can later be used to cover various expenses and liabilities by the family, including day-to-day living expenses, children’s education, outstanding loans and other financial obligations.
Reasons to buy ₹ 2 crore term insurance plan
Below are some reasons to buy a ₹ 2 crore term insurance plan:
A ₹ 2 crore term insurance plan can provide your loved ones with much-needed financial security in your absence. Your family members can use the plan to cover a range of financial needs, from everyday costs to substantial expenses
A term insurance plan with a cover of ₹ 2 crore can replace your income in your absence and provide your family with money to pay their regular expenses and maintain their standard of living.
Insufficient financial coverage can force your loved ones to cut corners. They may have to prioritise some needs over others. However, a ₹ 2 crore term insurance plan can be adequate to cover most financial needs. The sum is high enough to ensure your loved ones have a financial safety net in their hour of need. It can provide them with peace of mind and liquidity for a long time
Debt like home and car loans can be hard to pay in the absence of the breadwinner. A ₹ 2 crore term plan can offer your loved ones the necessary funds to settle outstanding debt in your absence. This financial cushion not only protects your assets but also allows your loved ones to maintain their quality of life without the added stress of debts
A ₹ 2 crore term insurance plan can be instrumental in ensuring your children get to live the life they deserve. The insurance payout from the plan can be used to cover needs like a child's higher education or marriage. It can help your children pursue their personal and professional goals without having to worry about the funds
The affordability of ₹ 2 crore term insurance plans makes them ideal to ensure substantial financial protection without compromising on the budget. These plans offer a significant life insurance coverage of ₹ 2 crore at relatively affordable premiums. As a result, policyholders can secure a higher sum assured at a lower premium compared to other types of life insurance
How does a ₹ 2 Crore Term Insurance Plan Work?
A ₹ 2 crore term insurance plan functions like any other term life insurance. You need to pay regular premiums to the insurance provider in return for your family's financial protection in your absence during the policy term. The premium amount is determined according to various factors such as your age, health condition, lifestyle and the chosen coverage amount.
When you purchase the plan, you select a policy term. In the unfortunate event of your absence during the policy term, the plan provides a death benefit to your beneficiaries. ₹ 2 crore term insurance offers flexibility in choosing the mode of payout. You can opt for a lump sum amount or choose a regular income option. This amount can be used to cover various expenses, including outstanding loans, house expenses, higher education costs and more.
Benefits of ₹ 2 Crore Term Insurance Plan
Customisation with riders
A ₹ 2 crore term insurance plan can be customised according to your needs. You can add riders to your base policy to enhance the coverage of your term insurance plan as per your need.
Tax advantages under the Income Tax Act, 1961
A ₹ 2 crore term insurance plan can offer tax* benefits on your term insurance policy. The premium paid for a ₹ 2 crore term plan offers a deduction of up to ₹ 1.5 lakh per annum subject to conditions prescribed under Section 80C* of the Income Tax Act, 1961 and the premiums for your health-related riders offer deduction under Section 80D*, of the Income Tax Act, 1961. The payout of ₹ 2 crore received by the beneficiary is also exempted subject to conditions prescribed under Section 10(10D)* of the Income Tax Act, 1961.
High coverage at affordable premiums
Accumulating a sum of ₹ 2 crore to leave behind as a legacy for your loved ones can typically demand substantial investments and savings. However, term insurance provides affordability in this regard. A ₹ 2 crore term insurance plan can be bought for an affordable premium rate.
Financial protection for your loved ones
A sum as high as ₹ 2 crore can offer optimal financial protection for your loved ones and help cover a wide range of their financial needs. It can be used for both daily essentials and future goals while being sufficient to tackle inflation.
Flexible Premium Payment
The plan offers flexible premium payment methods that can be personalised to suit your needs. You can choose from monthly, quarterly, semi-annual and annual payments.
Who Should Buy a ₹ 2 Crore Term Insurance Plan?
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Young professionals
Primary Earners
Young Parents
Self-employed individuals
Non-Resident Indians (NRI)
Working women
Young professionals
Buying a ₹ 2 crore term insurance plan at a young age can ensure long-term financial security for your loved ones. Moreover, you get affordable premiums when buying a term insurance at a young age.
Primary Earners
If you are the primary breadwinner supporting your family, a high life cover` term plan ensures that your loved ones remain financially secure in your absence.
Young Parents
A ₹ 2 crore term life insurance plan can provide young parents with peace of mind, knowing their children’s future is financially protected. It ensures that your children have adequate funds for education, day-to-day expenses and long-term security even if you are not around.
Self-employed individuals
Unlike salaried employees who may have employer-provided life insurance, self-employed individuals need their own financial safety net. A ₹ 2 crore term plan can help protect your family from financial instability in case of an unforeseen event.
Non-Resident Indians (NRI)
NRIs can buy a high sum assured term insurance plan to secure their family's future in India. It ensures that their dependents are financially stable and can cover their commitments.
Working women
Working women can buy a ₹ 2 crore term insurance plan that can protect the financial interests of their parents, spouse and children.
Young professionals
Buying a ₹ 2 crore term insurance plan at a young age can ensure long-term financial security for your loved ones. Moreover, you get affordable premiums when buying a term insurance at a young age.
Primary Earners
If you are the primary breadwinner supporting your family, a high life cover` term plan ensures that your loved ones remain financially secure in your absence.
Young Parents
A ₹ 2 crore term life insurance plan can provide young parents with peace of mind, knowing their children’s future is financially protected. It ensures that your children have adequate funds for education, day-to-day expenses and long-term security even if you are not around.
Self-employed individuals
Unlike salaried employees who may have employer-provided life insurance, self-employed individuals need their own financial safety net. A ₹ 2 crore term plan can help protect your family from financial instability in case of an unforeseen event.
Non-Resident Indians (NRI)
NRIs can buy a high sum assured term insurance plan to secure their family's future in India. It ensures that their dependents are financially stable and can cover their commitments.
Working women
Working women can buy a ₹ 2 crore term insurance plan that can protect the financial interests of their parents, spouse and children.
What are the Key Factors to Consider Before Choosing the Best ₹ 2 Crore Term Insurance Plan?
Below are some factors to consider when selecting the ₹ 2 crore term plan:
Assess the Coverage Amount
While ₹ 2 crore is a substantial sum, it may not be the right fit for everyone. You must evaluate your financial obligations, lifestyle expenses and future goals to determine whether you need more or less insurance coverage before making a decision.
Evaluate Policy Tenure
It is important to choose a policy tenure that aligns with your age, financial commitments and the needs of your dependents. A longer tenure can provide extended coverage, but it may also impact your premium.
Determine Premium Affordability
A higher sum assured can result in a higher premium. So, you must ensure the premium is within your budget and does not strain your finances while still offering the necessary insurance coverage` you need.
Check the Claim Settlement Ratio
The claim settlement ratio is an important metric in understanding the insurance company's track record of honouring customer claims. Reviewing this ratio helps you select a reliable insurer who will provide financial security to your family when needed. Typically, the higher the claim settlement ratio, the better it is.
Consider Adding Available Riders
Riders enhance the plan’s coverage by offering additional benefits. A ₹ 2 crore life insurance plan can offer different riders. Make sure to assess their costs and choose the ones that suit your requirements.
Understand Purchase Requirements
Each insurer may have a different purchase process and eligibility criteria, and some may even require medical tests before approving the policy. Make sure you are aware of these requirements to avoid surprises during the application process.
Review Policy Exclusions
Every term insurance plan has some exclusions. These are conditions and situations where the insurer will not provide coverage. Understanding these exclusions can help your loved ones avoid claim rejections and confusion later.
Understand the Claims Process
A quick and hassle-free claims process is crucial for your nominee. Therefore, make sure to check how simple or complex the process is and choose an insurance company with a straightforward and efficient claims system.
Look for Flexibility in Upgrading or Modifying the Plan
Your financial needs may change over time, so it is beneficial to have a term insurance policy that allows you to increase coverage or make modifications as required during important life stage changes.
Verify Tax Benefits
Term insurance plans offer tax* benefits under various sections of the Income Tax Act, 1961. Understanding these benefits ensures you can maximise tax savings while securing your family’s future.
How to Choose the Right ₹ 2 Crore Term Insurance Plan
Premiums
Claim Settlement Ratio
Riders
Age
Financial Dependent
Evaluating the premium cost and choosing a premium that fits your budget and income is crucial. Make sure to check the premium payment frequency and select a plan that offers flexible options.
Factors like your age, health, lifestyle and the coverage amount can impact the premium.
You must carefully assess these to understand how they may affect the premium for your plan.
The claim settlement ratio is a crucial metric that helps you understand the insurance company's reliability in settling its claims.
Opting for companies with a consistently high claim settlement ratio is important to ensure a smooth claims process for your nominees.
Riders help you enhance your term insurance coverage. They can offer additional financial protection in unique circumstances and ensure you and your loved ones have the funds you need to navigate life's many challenges.
However, it is essential to note that riders can be added to your existing plan at an additional cost.
Therefore, it is important to evaluate the cost of each rider against its coverage.
Your age is one of the most important factors in choosing a ₹ 2 crore term insurance plan, as it directly impacts the policy tenure, premium rates and overall coverage needs. If you are young, you can secure a high coverage amount at a lower premium. If you still have dependents, securing a term plan is essential even at later stage of your life. In such cases, you may need to balance the sum assured with an affordable premium.
The number, age and needs of your dependents also influence your choice of a term insurance plan. If you have young children, you must consider expenses related to their education and healthcare. If securing your spouse, you should factor in their lifestyle and medical needs. For ageing parents, healthcare and daily living costs should be prioritised. These factors can help you select a suitable term plan.
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Frequently Asked Questions
Can a person have two term insurance plans?
Yes, you can purchase two term insurance plans if you deem it necessary. Life insurance companies permit policyholders to maintain multiple plans. However, it is essential to consider the premium costs associated with each plan.
Who should opt for a ₹ 2 crore term insurance plan?
How much premium do I need to pay for a ₹ 2 crore term insurance plan?
Do I need a ₹ 2 crore term plan if I already have a traditional term insurance?
What documents are required to buy a ₹ 2 crore term insurance plan?
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