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1 Crore Term Insurance

1 crore term insurance is the purest form of life insurance plan that provides a life cover of 1 crore in exchange for a fixed affordable premium for a specific duration. ...Read More

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TERM INSURANCE PLANS BUYING GUIDE
Term Insurance

Best Term Insurance Plan for 1 crore

Best Term Insurance Plan for 1 crore
November 11, 2024

Table of Content

 

Term insurance come as a huge financial safety net for a family in times of need, such as financial hiccups or the demise of the breadwinner. However, how big an amount should you take to secure your family? In one of our previous articles, we told you how having a second insurance policy or a critical illness policy can help. However, considering the rising cost of livelihood in the cities, buying an insurance policy with a coverage of Rs 1 crore becomes as important.

What Is 1 Crore Term Insurance?

A 1 crore term policy ensures the beneficiary or nominee receives Rs. 1 crore if something happens to you during the policy term. This amount helps them manage financially by replacing lost income, clearing debts, and maintaining financial independence for life.

Why Do You Need a 1 Crore Term Insurance Plan?

A Rs. 1 crore term insurance policy is designed to provide critical financial protection for your loved ones in case of unexpected events. It offers life insurance coverage for a specified period, and if the policyholder passes away during this time, their beneficiary receives Rs. 1 crore. This sum is intended to cover lost income and settle financial liabilities.

To determine the right coverage amount, you can use a term insurance calculator. This tool considers your current income and outstanding debts to calculate the appropriate sum assured. It also recommends the most suitable policy duration based on your age.

Using the term insurance calculator helps you understand the premium required for a 1 crore term insurance policy. It allows you to plan effectively to safeguard your family's financial stability.

Understand How a 1 Crore Term Insurance Plan Works?

Every good financial portfolio has a term insurance policy. These insurance plans offer life coverage for a specific tenure. The beneficiary receives the sum assured payout if anything happens to the policyholder while the plan is active. We can understand this better with an example.

Arvind, a 25-year-old IT engineer, purchased a Rs. 1 crore term policy for 35 years. As per the policy terms, he would receive life coverage of Rs. 1 crore for the next 35 years as long as he fulfilled his annual premium payment obligation. As a young and healthy policyholder, Arvind benefitted from incredibly affordable annual premiums despite his high coverage amount. After his 40th birthday, Arvind met with a fatal accident. His beneficiary, his mother, filed a claim with his insurance company. Since Arvind paid his premiums on time for the previous 15 years, his mother received the sum assured payout of Rs. 1 crore. She utilised part of the money to pay off Arvind’s pending car loan debts. She kept the rest away safely to help her with future medical and financial emergencies.

What is the Benefit of Buying a 1 Crore Term Insurance Plan?

Buying a 1 crore term insurance plan is imperative to cover life risks so your family can be financially stress-free even when you are not around. Apart from this, there are numerous other benefits of purchasing a term insurance plan, and they are:

  • Large Coverage at Low Premiums

    • A 1 crore term insurance only covers life and does not provide maturity benefits, unlike life insurance policies offering death and maturity benefits. You can, therefore, get coverage as high as Rs. 1 crore at affordable premiums. For most people who prioritise their family’s financial security, a term plan is an ideal tool regardless of their income and monetary restrictions.

  • Financial Security for Your Family

    • Coverage of Rs. 1 crore will provide your family with a lump sum amount in case of your untimely demise in the form of a death benefit. The payout can help fulfil long-term goals, deal with financial emergencies, and continue with the same lifestyle with no dearth of funds.

  • Clear Current Debts

    • A 1 crore term plan serves as a financial safety net for your family, especially if you have incurred heavy debts to buy a dream home, purchase a car, etc. The death benefit in a lump sum helps them clear the outstanding debts and protects them from a financial crisis.

  • Ways to Pay Your Premium

    • You can choose to pay the premium for the best 1 crore term insurance plan at your convenience. Some of the available options include:

    Single Payment

    You can avoid recurring payments with the single payment option. Pay the entire premium upfront while purchasing the plan.

    Limited Premium Payment

    You can pay the premium for a specific period and reap the benefit for the entire policy term.

    Regular Premium Payment

    A regular premium payment option is more affordable and easy on your pocket as it is spread over the entire policy tenure. It can be monthly, quarterly, half-yearly, or yearly as per your convenience.

  • Payout Options for Benefits

    • Depending on your needs, you can select from the following death benefit payout options:

    Lump Sum Payout

    The benefit amount is paid out as a lump sum to your family which they can utilise to clear outstanding debts or to meet any other requirements.

    Regular Income

    The death benefit will be paid in the form of a regular income for a specific period.

    Combination of Regular and Lump Sum Payout

    Part of the benefit will be as a lump sum, with the remaining paid out as regular income.

  • Complete Coverage with Add-On Options

    • You can increase the coverage with additional riders for the base plan of a 1 crore term plan that provides financial security during critical illnesses, partial or permanent disability, accidental death, major or minor illnesses, hospitalisation, etc.

  • Reduce Your Annual Taxes1

    • You can reduce your tax burden with a 1 crore term insurance plan by availing of the benefits under Sections 80C and 10(10D) of the Income Tax Act 1961.

Why Buy a Rs. 1 Crore Term Insurance Plan?

Here’s how an Rs. 1 crore term insurance plan can benefit you:

  1. High Coverage at Affordable Premiums

    Term insurance plans offer incredibly pocket-friendly premiums. You can gain life coverage of Rs. 1 crore for less than Rs. 630 per month. The premiums will remain the same throughout the policy tenure, ensuring you don’t have to worry about sudden financial stress. Being affordable is one of the most important benefits of term insurance, but it’s also crucial to determine how much term insurance do I need to ensure adequate coverage for my loved ones.

  2. Debt-Free Legacy

    When you purchase a term insurance plan, you help secure your family’s finances. In case something happens to you, your loved ones are left behind to deal with any debt you might leave behind. The payout from your Rs. 1 crore term policy allows them to clear any pending debt. You can ensure that you leave your family a debt-free legacy.

  3. Enhanced Coverage

    You can enhance your Rs. 1 crore term policy with riders like critical illness cover and accidental death benefit. These add-ons provide more financial security for you and your loved ones.

  4. Fulfill Future Financial Goals

    Term plans provide a financial safety net that your loved ones can utilise to fulfill future financial goals. The amount can pay for your child’s higher education or help your spouse secure their retirement. Post evaluation of your financial needs if 1 crore isn’t adequate then you can opt of 2 crore term insurance. 

  5. Maximise Tax Savings

    6. Taxpayers can claim deductions against the premiums paid towards their term policy under Section 80C of the Income Tax Act. Always check prevailing tax laws and consult a financial advisor to maximise tax savings.

Why to buy a 1 crore term insurance?

Why to buy a 1 crore term insurance?

How to Determine the Right Coverage Amount?

Selecting the ideal coverage amount can seem overwhelming for many policyholders. The insurance coverage should help keep your family financially secure if something happens to you during the policy term. Let’s evaluate the top factors to consider while selecting the best term insurance plan for 1 crore for your loved ones.

  • Your Age

    Your age impacts your coverage and the tenure of your policy. Individuals in their 20s can opt for 40-year plans, while those in their 30s or 40s can consider 25-year plans. Young and healthy individuals may not have many financial liabilities or responsibilities. However, these individuals can get a higher sum assured at more affordable rates. Evaluating your age empowers you to select the best coverage for your needs.

  • Your Income

    You should assess your income and monthly expenses. Use the information to evaluate your Human Life Value (HLV). It helps you understand how much your family needs in your absence. Select a sum assured that is at least your HLV, if not more. Finally, consider the premium of each option. Identify policies that offer adequate coverage without breaking the bank. Your premiums should fit into your budget comfortably.

  • Financial Liabilities

    Take stock of your current financial commitments. Consider your outstanding loans, children’s education expenses, and monthly household expenses. The comprehensive assessment will give you a clear picture of the financial umbrella your family may need in your absence.

  • Account for Inflation

    Inflation is a silent but powerful force that erodes the purchasing power of money over time. When determining your coverage, factor in the potential impact of inflation on future expenses. A 1 crore term insurance plan today should account for the increased cost of living in the years to come.

  • Consider Long-Term Goals

    Anticipate future milestones such as your children’s higher education, marriage, or buying a home. Your coverage should protect your family today while adapting to their evolving needs over time.

  • Consult a Professional

    Navigating the complexities of insurance can be challenging. You can utilise our online calculators to understand how much your family could need in your absence. You can also consult with a professional financial planner. They can provide personalised guidance based on your unique circumstances.

Is It Advisable to Choose a Plan with More Extensive Coverage?

Now that you know how to evaluate your life coverage, you may wonder whether you should opt for more extensive coverage. Let’s see whether choosing a higher sum assured of Rs. 1 crore impacts you.

  • Cost-Effective Premiums

    Term insurance policies, including the 1 crore term plan, offer substantial coverage at remarkably affordable premiums. The cost remains affordable whether you opt for a 50 lakh or 1 crore term insurance plan. You can enjoy higher coverage of Rs. 1 crore without impacting your bank balance.

  • Steady Premiums

    Term plans let you enjoy consistent premiums throughout the policy term. You can choose a Rs. 1 crore policy for up to 30 years and pay the same premium annually. Purchasing term insurance coverage in your 20s and early 30s empowers you to enjoy long-term affordability and financial predictability.

  • Adequate Cover

    The Rs. 1 crore term insurance plan provides robust coverage. You can opt for this higher amount to help your loved ones meet future financial goals and maintain their standard of living despite high inflation rates.

  • Riders

    Boosting your sum assured isn’t the only way to enjoy extensive coverage. You can customise your policy with riders that offer additional benefits. Critical illness riders and other options provide flexibility, tailoring your insurance policy to meet specific needs and circumstances.

Factor to be Considered Before Buying Best Term Insurance Plan for 1 Crore

Investing in a Rs. 1 crore term insurance plan requires careful consideration of various factors. Here’s a comprehensive guide to help you make your decision.

  • Coverage Amount

    Assess your family’s financial needs, including outstanding loans, future expenses, and lifestyle aspirations. Ensure that the Rs. 1 crore coverage adequately meets these requirements and provides a financial cushion for your dependents.

  • Policy Tenure

    Choose a policy tenure that aligns with your financial goals and responsibilities. Consider factors such as the duration of your outstanding loans, the education tenure of your children, and your retirement age. Ideally, the policy should continue until you retire.

  • Premium Affordability

    Evaluate your budget and select a plan with premiums you can comfortably afford throughout the policy tenure. Opt for a premium payment frequency (monthly, annually, etc.) that suits your financial planning.

  •  Claim Settlement Ratio

    Research and review the claim settlement ratio of the insurance company. A high ratio indicates the insurer’s efficiency in settling claims. It lets you rest assured that your beneficiary will receive a swift settlement after filing a valid claim request.

  •  Riders

    Explore additional riders that complement your coverage. Critical illness, accidental death, and waiver of premium riders can enhance your protection based on your specific needs.

  • Purchase Requirements

    Understand the insurer’s policies regarding medical examinations. Some plans may require medical tests for term insurance based on age and coverage amount. Be prepared for any necessary health assessments.

  •  Policy Exclusions

    Thoroughly read and understand the policy exclusions. Different insurance plans may have specific conditions or situations that are not covered. Being aware of these exclusions ensures clarity about the scope of your coverage.

  • Claims Process

    Understand the claim settlement process of the insurance company. A straightforward and transparent claims process is crucial during times of need. Quick and hassle-free claim settlements ensure that your family receives the intended financial support.

By thoroughly considering these factors, you can make an informed decision when purchasing a Rs. 1 crore term insurance plan.

Who Should Opt for Rs. 1 Crore Term Plan?

The best 1 crore term insurance plan often is sought after by individuals from various walks of life who are concerned about their family’s financial security. The benefits and affordability make it more popular than a regular life insurance policy. However, here are some categories of people who can opt for and benefit from a 1 crore term insurance policy:

Who Should Buy

Benefits of Buying 1 Crore Term Insurance Policy

Young professionals

Young professionals should buy the 1 crore term plan to provide financial security for their families and to substitute their income in their absence.

Newly married couples and young parents

With additional responsibilities at these stages, they should invest in a 1 crore term insurance plan for the financial security of their partners and children when they are not around.

Youths who have incurred debts

Youths with debts like personal loans, education loans, vehicle loans, etc., should consider purchasing the 1 crore term plan to avoid passing on the debt burden to their family.

Persons with home loans

A home loan is substantial, and in case of an eventuality, your family will face a difficult financial situation. To avoid this, persons with home loans should buy a 1 crore term plan.

Sole earning members

For a financial safety net for their family in their absence, sole-earning members should buy a 1 crore term plan.

Business Owners

A term plan will ensure the continuity of the business while providing financial security for their family.

Self-employed individuals

To protect their families from potential business loss in the event of their sudden demise and to substitute the income, these individuals should consider buying a term plan.

Investors

In case of an unfortunate event, the regular subscriptions for wealth creation will stop abruptly. A term plan will ensure the continuation of investments and secure the family’s future.

Persons with elderly parents

Adult children concerned about their parents should invest in a term insurance plan. The plan will secure their parents financially in case of their untimely demise.

Individuals planning for retirement

Persons with dependents should consider buying a term plan when they are nearing retirement age. This will ensure that their family is protected till the dependents are financially secure.

Senior Citizens

Senior citizens concerned about the financial security of their partners should purchase a term plan with whole-life coverage.

Homemakers

To make up for the cost of their services in the event of their untimely death, a term plan for homemakers becomes imperative.

Women

Working women contribute to the family income. To continue this additional income advantage in their absence, they should consider buying a term plan.

Taxpayers1

To reduce the tax burden with savings under Section 80C and Section 10(10D) of the Income Tax Act 19611 while providing financial security for their family, taxpayers should opt for a 1 crore term plan.

How to Choose the Best Term Insurance Plan for 1 Crore?

Finding the right and best term insurance plan for 1 crore is essential for ensuring financial security for your loved ones. The premium cost is a key factor when choosing a policy. Apart from your age, the policy tenure can impact your premium. The table below can help you determine the best time to buy a policy based on the premium amount.

Age

Policy Tenure

Monthly Premium (Rs.)

Monthly Premium with Critical Illness Rider (Rs.)

Monthly Premium for Return of Premium Plan (Rs.)

20

40 years

692

711

1581

30

40 years

1176

1286

2592

40

40 years

2343

2885

4775

 

Note – The above premium rates are for a non-smoker healthy male inclusive of 5% online discount (applicable only for 1st year premium) and exclusive of taxes & levies as applicable. HDFC Life Click 2 Protect Super (UIN: 101N145V05) is a Non-Linked, Non-Participating, Individual, Pure Risk Premium/ Savings Life Insurance Plan. Life Insurance Coverage is available in this product.

There is few types of term insurance that you can select from:

  • Return of Premium Plans

    These policies provide a maturity payout equal to all paid premiums. On survival, the policyholder will receive the premiums paid, excluding taxes, as a benefit.

  • Increasing Sum Assured Plan

    You can choose a plan that increases your sum assured by a certain percentage each year. These policies help take care of your family’s evolving financial goals.

  • Riders

    Choose from our three riders to enhance your coverage and boost your family’s financial protection.

FAQ's on 1 Crore Term Insurance

Q: What is the minimum income requirement to purchase term insurance of Rs. 1 crore?

A: The minimum income requirement to purchase a Rs. 1 crore term plan varies from one insurance company to the next. Ideally, individuals who earn around Rs. 5 lakhs or more per year can purchase the required policy. You can check with your preferred insurance provider to get the plan you want.

Q; What are the eligibility criteria to buy the best term insurance plan for Rs. 1 crore?

A: Individuals between the ages of 18 and 65 are eligible to purchase a Rs. 1 crore term policy in India, as part of the term insurance eligibility criteria. The insurance company may also verify your residency status and income before issuing the policy.

Q: At what age should I buy the best term insurance plan for 1 crore?

A: When it comes to purchasing insurance, the earlier you start, the better. Purchasing a plan in your early 20s and 30s can help you achieve financial stability later in life.

Q: Should I buy a 1 crore term insurance plan or an endowment plan?

A: The decision between a 1 crore term insurance plan and an endowment plan depends on your financial goals, protection needs, and preferences.

Q: How to calculate term insurance premiums?

A: You can use our online premium insurance calculator to better understand the cost of getting adequate coverage.

Q: How do I buy a 1 crore term insurance plan online?

A: Once you select your policy, you can visit the insurance company’s website to pay the premium and purchase your policy. 

Q: What is the minimum age to purchase a term insurance plan?

A: Individuals must be at least 18 to purchase a term plan.

Q: What are the benefits of buying term insurance at an early age?

A: When you purchase term insurance at an early age, you can benefit from high coverage at a low premium. Additionally, you can remain covered for longer without worrying about higher premiums later.

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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@As per integrated annual report FY23-24, available on www.hdfclife.com. As of May 2024

@@@Premium applicable for a 20 year old non-smoker healthy male with a policy term of 40 years inclusive of 5% online discount (applicable only for 1st year premium) and exclusive of taxes & levies as applicable. HDFC Life Click 2 Protect Super (UIN: 101N145V05) is a Non-Linked, Non-Participating, Individual, Pure Risk Premium/ Savings Life Insurance Plan. Life Insurance Coverage is available in this product. Monthly premium of Rs. 692 and daily premium of Rs. 23.

##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

@@5% discount is available on online purchase for the 1s year premium for HDFC Life Click 2 Protect Super (UIN: 101N145V05) is a Non-Linked, Non-Participating, Individual, Pure Risk Premium/ Savings Life Insurance Plan.

***Online Premium for Life Option for HDFC Life Click 2 Protect Super (UIN: 101N145V05), 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 622/30=20.7).

**7% online discount available on 1st year premium only

1. Tax benefits are subject to conditions under Sections 80C, 80D, Section 10(10D) and other provisions of the Income Tax Act, 1961.

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