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Table of Content
1. What Is a Rs. 50 Lakh Term Insurance?
2. Why Buy Rs. 50 Lakhs Term Insurance?
3. Key Features of ₹50 Lakh Term Insurance
4. How Does a Rs. 50 Lakh Term Plan Work?
5. What Are the Benefits of Rs. 50 Lakhs Term Insurance?
6. How to Choose the Right Rs. 50 Lakhs Term Insurance Plan
7. Important Things to Know Before Buying Term Life Insurance Plans
8. Is ₹50 Lakhs Sufficient Term Insurance Coverage for My Family?
9. Documents Needed to Buy a 50 Lakh Term Insurance
10. Summary
Every good financial plan includes a term insurance plan. These plans offer life cover for a specific time, providing your family with financial security during a difficult time. Since traditional term policies are pure life insurance products, they do not offer any additional maturity benefit, making them affordable. However, some plans today offer a Return of Premium option, which pays you an amount equal to all premiums paid on maturity if you outlive the policy term. A 23-year-old non-smoker can get a high sum assured of Rs. 50 lakhs for just Rs. 800 each month. Let’s better understand what a Rs. 50 lakhs term insurance plan is and how it benefits you.
A 50-lakh term policy offers life insurance coverage of Rs. 50 lakhs for a given time. If anything happens to the policyholder during the plan tenure, the beneficiary receives a payout of Rs. 50 lakhs, ensuring financial security through life insurance protection.
None of us knows what life has in store for us. An unexpected illness or accident could take us away from our loved ones. Term plans provide our loved ones with the finances they require during this uncertain time. The payout from the term plan should be enough to help your family maintain their standard of living in the future or pay off any outstanding loans. You can calculate your Human Life Value or HLV to better understand how much your family requires. HLV refers to the present value of future income expenses, investments, and liabilities. Individuals who earn around Rs 5 lakhs per year should get a term plan that offers at least Rs. 50 lakhs as the sum assured.
Here are some of the main reasons to consider buying this term plan:
A 50 lakh term plan premium is usually considered a reasonable investment by most people. This is because it does not disrupt the overall budget much and allows one to opt for a longer tenure. Not to mention, you can work and live your life in peace, knowing your family is financially secure.
With riders and add-on options, a 50 lakh term insurance plan provides comprehensive protection. You can add suitable riders as per your specific needs, including a critical illness rider or an accidental death benefit rider or go for a return on the premium rider, among others. These riders boost your insurance cover for a nominally extra premium.
Considering the coverage provided for a nominal premium, term insurance 50 lakhs is perfect to secure your family financially. They can maintain the existing lifestyle and live comfortably even in your absence.
If you have availed of loans to meet financial goals like owning a dream house, buying a car, going on a vacation, or higher education for children, the onus of repaying the loans shifts to your family in case of your untimely death. If you invest in a 50 lakh term plan, your family can repay the outstanding liabilities with the death benefit they receive.
Here are some of the main term insurance 50 lakhs features that you must remember to make an informed decision:
Term insurance premium for 50 lakhs is cost-effective considering the coverage it provides. This makes it an affordable option to secure your family financially. You can opt to remain invested for a longer period, considering the reasonable premium.
With options to avail of additional coverage alongside Rs.50 lakhs are available in the base plan with specific riders as per your requirements, easy claim settlement, etc. The 50 lakh term plan provides complete protection to you and your family.
The term insurance 50 lakhs offers extensive coverage and gives you peace of mind that your family has enough funds for sustenance and to meet children’s education expenses, pay off outstanding loans and debts, and any unforeseen expenses in your absence.
We can understand how a Rs. 50 lakh term insurance works with an example. Rahul is a 24-year-old who just started working. His salary is enough to cover his basic monthly expenses. Rahul stays with his parents. Both of them are still working and have saved up for their retirement. Rahul purchases a term plan offering Rs. 50 lakh coverage for 30 years. After three years, he takes a loan to buy a two-wheeler. About a year later, while still repaying the loan, he meets with a fatal accident. His mother, the term policy beneficiary, receives the payout of Rs. 50 lakh. She can use the amount to pay off Rahul’s pending loan. The money helps her and her husband maintain their finances at a difficult time.
When you purchase a term insurance policy worth Rs. 50 lakhs, you benefit from:
When looking for a Rs. 50 lakh term policy, you should consider the following crucial points:
Term policies are popular since they provide high coverage at affordable rates. Ensure you look for plans that offer the best benefits at a pocket-friendly premium.
The IRDAI regularly releases the individual death claim settlement ratio for various life insurance companies. It lets you know how many claims the company settled of all requests received. The higher the ratio, the better.
Always check the add-ons that various insurance companies offer. You could boost your coverage and enhance your family’s financial future by selecting the add-ons that suit your needs. There are several types of term insurance like the term insurance with return of premium which can be availed with the TROP add-on rider.
Every insurance company has different terms and conditions as well as additional services and benefits for their 50 lakh term insurance. Make sure that you have checked all aspects in detail and compared them well before deciding. You must also go through company and plan reviews and recommendations from previous or existing customers. The claim settlement process and ratio are also important aspects to assess before finalising the plan.
Your existing liabilities, financial goals, and the time required to settle the dues and fulfil the goals should be the yardstick for choosing the coverage period for Rs. 50 lakh plans. It is recommended you buy the policy from an insurance company that offers whole-life coverage.
Riders are add-on benefits that enhance the life coverage of Rs. 50 lakhs term plan and provides customisable insurance options. If you anticipate any critical illness in the future, considering your lifestyle habits, family history, etc., opting for a critical illness rider will save you from digging into your savings to manage treatment costs.
Every insurance company’s directory has varied types of 50 lakh term insurance plans. Before confirming your choice you should compare the plans available with different players. Every plan has certain advantages and disadvantages. Read between the lines and understand the terms and conditions of the plans to make your selection resourceful.
Some factors impact your 50 lakh term insurance purchase, and you should focus on them before identifying the best plan. They are:
Claim settlement ratio indicates the number of claims settled without a fuss in proportion to the claim applications received. The reliability in terms of claim settlement is measured by the ratio. The data can be obtained from the report generated by IRDA every financial year. A 99% ratio indicates that the insurance company seldom rejects any claims filed.
The maximum coverage period for term insurance 50 lakhs, which varies with the insurer. Generally, it is between 75 to 100 years. Those who aim at affordable premiums for Rs. 50 lakh coverage should consider the fact that premiums are higher for extended periods before deciding on the policy term.
The sum assured represents the life cover provided for 50 lakh term insurance i.e., the death benefit that is provided to the nominees. Consider the financial needs of your family vis a vis the monthly expenses, your outstanding debts to enable loan repayment with insurance benefits, children’s education expenses, etc., before deciding the sum assured to ensure that your family does not face a financial crisis when you are not around.
The 50 lakh term insurance plans have various add-on benefits like critical illness riders, accidental death or disability riders, return of premium riders etc., that enhance the coverage for an additional premium. The survival benefits in return of premium policies make the plan a combination of protection and savings.
Premium waiver benefits are available in some 50 lakh term insurance plans. This benefit allows waiver of premium for a further period while retaining the life cover when the policyholder encounters any incident that results in loss of income.
One of the critical factors that impact premiums is age. The insurance policy for young earners is more cost-effective than the policy for older adults. Also the lifestyle, the existing health conditions, and the sum assured also impact the premium. The policyholder has to disclose every piece of information since the suppression of facts may result in claim rejection. You can calculate the applicable premium using the term insurance calculator.
Section 80C of the IT Act 19611 allows the deduction of the premiums paid towards life insurance plans from the taxable income and the death benefits are tax-free under Section 10(10D)1 exempts death benefits from tax.
Whether 50 lakh term insurance coverage is adequate for your family depends on the following:
The life cover should be adequate to beat inflation and enable your family to maintain the existing lifestyle. 10 to 20 times the annual income is the recommended life cover to serve the purpose of insurance.
If you are the sole earning member of your family it is imperative to consider the number of dependants and their financial requirements like living expenses, education costs, marriage expenses, loan repayments, etc., for arriving at the sum assured.
Taking over the responsibility of repaying the debts you have incurred like home loans, car loans, personal loans, education loans, etc., in unprecedented times is the last thing you would wish for your family. You should consolidate all the outstanding liabilities at the time of purchasing a term plan and consider them while arriving at the sum assured for the term plan.
Human life value is a tool that enables insurance companies to determine the funds required for the family for sustenance if the policyholder expires during the policy term. It is an estimation of the economic worth of the policyholder considering his future income, liabilities, and expenses.
Submitting all the documents needed is as important as complying with the eligibility criteria for term plans. The mandatory documents required are:
- Passport, Driving Licence, etc.
- PAN is Mandatory Document
Passport
Voter’s Identity Card issued by Election Commission of India
Permanent Driving License
Aadhaar Card
Central KYC Identifier (can be accepted, if the downloaded documents are from the list of Officially Valid Documents (OVD) reflecting across Sr. No. 1 to 4 and there is no change in the address basis the document downloaded from Centralized KYC Registry (CKYCR) database as mentioned on the proposal form)
IT Returns, Bank Statement, Salary Slips, etc.
If financial stability for loved ones is a priority, a 50 lakh term insurance is what you need. With an option to enhance coverage with add-on benefits like return on premium riders, accidental death and riders, accidental disability riders, terminal illness riders, critical illness riders, and premium payment flexibility, the term plan can be tailored according to your needs. If the life cover is adequate considering aspects like income, current financial obligations, and number of dependents, a term plan is a reliable choice.
You must be at least 18 and earning to buy a term plan. If you're over 65, you might not be able to purchase a policy.
The premium amount for the term policy depends on your lifestyle, age, health, income range and more.
Term plans do not offer any maturity benefits. However, if you selected a Return of Premium policy, you will get the premiums back on maturity.
You can purchase a term policy worth Rs. 50 lakhs directly from our website.
To decide whether 50 lakh term insurance is enough, you should consider your income, number of dependents and their needs, outstanding liabilities, and human life value. It is generally recommended for the sum assured to be 10 to 20 times your annual income to beat the inflation.
Yes. The premiums paid towards the 50 lakh term insurance plan are eligible for deduction under Section 80C of the IT Act 19611 and the death benefits are tax-exempted under Section 10(10D).
References:
1. https://economictimes.indiatimes.com/markets/expert-view/what-should-be-the-criteria-for-selecting-the-right-kind-of-term-plan-dinesh-dilip-bhoi-answers/articleshow/110001188.cms?from=mdr
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##Individual death claim settlement ratio by number of policies as per audited annual statistics for FY 2023-24.
#Provided we have received all the relevant and required documents and no further investigation is required. Claim settlement process would be completed within stipulated timelines once the claim request is approved
^ Available under Life & Life Plus plan options
1.As per Income Tax Act, 1961. Tax benefits are subject to changes in tax laws.
*Online Premium for Life Option, Male Life Assured, Non-Smoker, 20 years of age, Policy term of 25 years, Regular pay, Annual frequency, exclusive of taxes and levies as applicable. (Monthly premium of 379/30=12.6)
@As per integrated annual report FY23-24, available on www.hdfclife.com. As of May 2024
ARN- DM/12/24/19047