Top Reasons to Buy a 1 Crore Term Insurance Plan

A term insurance plan is easy to understand and helps keep your family financially secure in case of an unforeseen casualty in the future. And that is why, term plans are extremely popular in India. However, a majority of policy buyers still struggle with one aspect of term insurance when they buy term insurance, which is also the most important one – term insurance coverage.

And hence, to ensure that you have adequate term life insurance, factor in your family’s future needs and financial responsibilities in detail, along with the future rate of inflation, so that even their smallest expenses can be taken care of. Quite recently, one crore term insurance has become a choice of coverage for most term plan policyholders – let us see why.

A ₹1 crore term insurance plan offers life cover of ₹1 crore for a certain period. In case of the demise of the policyholder, the death benefit under the insurance policy would be paid by the insurer to the nominee/policyholder on the fulfilment of the terms and conditions of the policy. The amount can help the nominee in meeting their financial obligations, including repayment of pending loans.

Whether the cover of ₹1 crore would be enough or not depends on the income of the policyholder, existing liabilities, dependants, and more. Therefore, before buying a term insurance plan, it is crucial to compare and understand the premium, policy term, exclusions, and claim settlement procedure.

When a family depends on one person's income, their sudden loss can leave loved ones struggling to meet everyday expenses. A ₹1 crore term insurance plan can provide financial support during this difficult period.

Some key reasons to buy a 1 crore term insurance plan include:

• Support for dependants: The proceeds from the claim can be used to meet the family's living expenses, including children's education and other needs.

• Repayment of outstanding loans: The family can use the money to pay off loans, including a housing loan, to avoid liquidating their savings.

• Insurance against loss of income: The claim amount can replace a part of the income that the person would have earned.

• Meeting future needs: The money can be used to meet the future needs of the family, like education and so on.

• Flexibility to the nominee: The nominee is free to utilise the money as per the family's needs, subject to any restrictions mentioned in the policy documents.

The benefits of a 1 crore term insurance depend upon the financial needs of the family. Therefore, before deciding on a 1 crore policy, an individual should assess their family's financial requirements and then decide whether they need that much coverage or not.

A ₹1 crore cover may be suited to people who have family members who are dependent on them or those that have substantial financial commitments. However, the right cover may vary for each family based on their individual needs.

• Individuals with a sole source of income: Covers that offer support to the family in case of an unfortunate incident are preferred for individuals who earn for their spouse or children or aged parents.

• Loan borrowers: A ₹1 crore cover can help in settling the dues if the earner has a huge loan amount outstanding.

• Parents with children: The cover can assist in fulfilling the financial needs for education and other expenses.

• Self-employed professionals: ₹1 crore cover can be a viable option for people with substantial income with dependants that require financial support.

• People with long-term commitments: With increasing financial needs with time, people with dependants may need to re-evaluate the cover based on their current and future needs.

The question of who should buy 1 crore term insurance depends on existing savings, outstanding liabilities, the number of dependants and the years remaining until financial independence.

The amount of term insurance coverage you need should be considered by a simple calculation – the sum assured should be between 10 – 25 times your annual income.

If you are young and have just started earning, your term plan sum assured can be as high as 20 – 25 times your annual income. For those aged 30 – 50 years, the sum assured can be about 10 – 15 times their annual income since their earnings may be greater. Hence, as your income increases, you can plan your term insurance coverage accordingly.

A high-cover policy should provide suitable protection at a premium the policyholder can afford. The following features deserve attention before deciding.

• Suitable sum assured: The cover should be in line with household expenses, outstanding dues, future needs, and existing assets.

• Affordable premium: The 1 crore term insurance premium would depend on factors such as age, health, drinking and smoking habits, policy term and added benefits, among others. It should be in the budget of the policyholder.

• Appropriate policy term: The cover should remain active for the years that the dependants are likely to rely financially on the policyholder.

• Optional riders: Depending on the plan, riders can be added to get additional benefits in the case of an accidental death or diagnosis of a specific critical illness. The exclusions and additional premium for the rider should be taken into account.

• Clear claim requirements: The nominee should be aware of the claim procedure, documents needed for processing, and other claim settlement modes.

• Payout options: Some policies offer the option of a lumpsum or regular payouts or a combination of the two. The policyholder should enquire about the available options.

• Policy exclusions: The policyholder should be aware of situations in which the claim would not be paid. They should also give truthful information while filling up the proposal form.

Comparing these features helps individuals choose to cover based on their needs rather than the sum assured alone.

If the policyholder dies during the policy term, the nominee or claimant must inform the insurer and submit the required documents. The insurer then verifies the details and assesses the claim under the policy conditions.

The process generally involves these steps:

• Register the claim: The nominee is to inform the insurer through their online or offline channels.

• Submit the documents: The insurance company might ask for a claim form, policies, a death certificate and the nominee's identity and bank details. Medical records or police reports may also be asked depending on the case.

• Claim assessment: The insurer investigates the documents and may ask for more information.

• Receiving benefits: The insurer is to pay the approved sum of money upon the claim being approved according to the terms stated in the contract.

Keeping your nominee updated about the details of the policy and where the papers are will see the process being smooth. Tata AIA also helps by having online ways for registering claims and submitting papers.

A ₹1 crore term plan can be bought online through Tata AIA's official website. Applicants should compare available plans and take note of eligibility criteria and policy terms before applying.

• Open the official site: Check out Tata AIA's ₹1 crore term insurance page to explore the plan benefits and other details.

• Provide the details: Get ready to give them the information they need, including an age, contact detail, whether you are a smoker and other details.

• Calculate the premium: You need to calculate the premium for an insured sum. The premium is determined by the term of the policy and the benefits selected.

• Compare the plans: Compare the sum assured riders, exclusions payout options and modes of premium payments between the various plans.

• Fill up an application form: Complete an application providing personal financial and health details and attach the necessary documents if required.

• Pay the premium: Pay the premium for the plan and review the application details and the insurance policies. The company will evaluate an application and then decide whether to issue a policy or not.

Check the policy documents and inform the nominee about the cover and the claim procedure once the policy is issued.

An important reason why 1 crore term insurance is a preferred choice of coverage is that it can cover a number of unforeseen risks and situations apart from your family’s future basic needs. Even after you consider the rate of inflation, one crore term plan ensures that your family will not have to touch their other savings and investments in case of unplanned emergencies in your absence.