Is a 1 Crore Term Insurance Plan Right for You?

When you look to buy term insurance, one of the most important factors you take into consideration is the coverage amount. The perfect coverage amount helps you to provide the correct financial cushioning for your family to help them carry on with life after your demise. You need to keep some very important points in mind when choosing the life cover. If you have a large number of responsibilities and duties, then opting for a large coverage of around INR 1 crore may prove to be beneficial in the long term. Take a look at this article to learn more about the factors to consider when choosing the coverage amount and how the right value can safeguard your family’s financial wellness.

How do you evaluate your life insurance requirement?

To evaluate your life insurance requirement, you need to do a detailed assessment of your current financial situation, keeping your risk appetite, investment objectives, and future goals and liabilities in mind. You can simply start by calculating your total disposable income (income minus expenses), keeping in mind basic living costs, inflation, and other debts and liabilities, such as loans, outstanding credit card payments, etc. Consider future financial goals, such as children’s education, marriage, and retirement plans for your spouse. Then, it would help if you accounted for your accumulated savings and investments to date, and by thoroughly analysing these, you can come to an amount that would provide financial security to your family in case of your absence.  Alternatively, you could use calculators as well to derive your life insurance requirements.

Reasons to choose an INR 1 crore term insurance plan

Listed below are some crucial factors why you may need a larger term insurance cover such as an INR 1 crore cover:

  1. A large number of dependents:
    First and foremost, you need to see how many dependent family members you have. If you have a large family with many people who depend on you financially, you will need a large coverage amount. If you have a spouse, two kids, parents, parents-in-law, and siblings who you support, you will have to go for extensive coverage, such as INR 1 crore, to support all their needs. Take the individual needs of each family member and the family’s long-term financial milestones to arrive at the correct coverage amount.
  1. Young kids:
    Children need a lot of financial support, as education costs are rising quite sharply. If you have very young children, you have to go for higher coverage. Keep their current school costs in mind and also factor in their higher education costs. Apart from this, you also have to ensure their future financial milestones are met with ease. So whether you wish to have funds for their marriage or their entrepreneurial aspirations, you will have to opt for a high-term life insurance coverage to cover their needs comfortably.
  1. High loan liability:
    Next, and very importantly, you have to calculate your total loan liability when you finalise your term insurance coverage amount. The proceeds from your term plan should be high enough to clear all your debts after your death and also pay for your family’s financial needs. Whether you have an unpaid home loan, education loan or personal loan, make sure the term plan covers it. It would not be fair for you to leave such a huge financial liability on your dependent family members, so do the calculator very carefully and select a suitable amount. For example, if you have an unpaid debt of INR 75 lakhs, get an INR 1 crore term plan.
  1. High lifestyle cost:
    Your death should not result in your family losing their financial independence. They should be able to carry on with their current lifestyle. If your current lifestyle is luxurious, get a high term insurance coverage as that would allow your family to carry on with their expenses even in your absence. You should make all the suitable arrangements to ensure your loved ones are safe and comfortable after your demise. There are several term insurance benefits, a large payout being one of them. Use this to your advantage.
  1. Sole earning member:
    If you are the sole earning member of your family, then you have to consider getting an INR 1 crore term insurance policy. This will help to support your family comfortably. However, if your spouse has an income and your parents receive their pension, your coverage amount may be lower. It is important to analyse your requirements, check your budget and then arrive at the correct term insurance coverage amount. Doing so will help you meet your financial goals and also help your family in the event of an eventuality.

These are some important reasons why you need a high coverage amount. If the above factors relate to you, then opt for a large cover such as an INR 1 crore term insurance plan and keep your family adequately covered.

The final word

Trouble often comes unannounced, and you never know what lies at the next juncture. Hence, you need to keep your loved ones safe so that even in your absence, they can carry on with their lives and not face any economic hardships due to your income being stopped. Getting a term insurance plan for a coverage sum of INR 1 crore can help you achieve this. Thankfully, some excellent plans are available in India from reputed life insurance companies that offer high coverage amounts. Do your research and choose the best policy at the best rate to keep yourself adequately covered.

By Edward Robinson

Looking to share my thoughts and opinions on a range of topics. Robinson aims to make upbent.com an enjoyable corner of the internet that brings a bit of lighthearted entertainment to readers' days. As the site develops, he intends to bring on a few other bloggers to add additional voices and expand the range of subjects covered beyond just his personal interests. Robinson sees long-term potential in upbent.com becoming a popular online destination.

Leave a Reply

Your email address will not be published. Required fields are marked *