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:

Financial Security

Adequate Coverage

Debt Settlement

Education and Future Planning

Premium Affordability

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

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.

How to Choose the Right ₹ 2 crore Term Insurance Plan

Below are some factors you must pay attention to when choosing a ₹ 2 crore term insurance plan:


Claim Settlement Ratio



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.

Claim Settlement Ratio

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.

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` Life cover is the benefit payable on the death of the Life Assured during the policy term

* Tax benefits are subject to conditions prescribed under Sections 80C, 80D, 10(10D), 115BAC and other provisions of the Income Tax Act, 1961. Goods and Services Tax and Cesses will be charged extra as per prevailing rates. Tax laws are subject to amendments made thereto from time to time. Please consult your tax advisor for details


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