The Term insurance policy offers a death benefit to the nominees; if the policyholder dies within the term of the plan. Term insurance is meant to offer financial support to the dependents or surviving family members; in case of an untimely demise. Term insurance is available at affordable premiums. It is high cover at low premiums.
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If you are in the age group of 30-40 years and are the sole earning member of the family; go for a term insurance policy of Rs 1 crore sum assured or more. You may believe a sum assured of Rs 50 Lakh is enough to take care of your family.
Think of inflation which is the rise in prices of goods and services. Therefore, you must go for a higher sum assured to secure family’s financial future.
Currently, there are several insurance companies that are offering online term insurance plans of Rs 1 crore or more.
Initially premiums of online term plans were not budget friendly. Then, the IRDA passed a new regulation vis-a-vis pricing of the online term life plans; forcing the insurers to reduce the premium rates for term insurance plans of Rs 1 crore or more.
Now, many insurers are offering Rs 1 crore basic term plans at a premium amount of Rs 450 a month to a 25 year old non smoker. The same term insurance with additional riders would cost anywhere between Rs 700 to 900 a month. This amounts to a much lower annual premium rate as compared to government-backed entities like LIC.
However, while purchasing the term insurance policy of Rs 1 crore, you must carefully go through the policy terms and check the underwriting norms as there are stringent rules.
See Also: How to Buy the Right Term Insurance Plan
Shyam is a technical manager in a private firm who wants to secure the financial future of his family by buying a term insurance policy. He wants to secure his family in case of any eventuality and seeks to provide them with a sound financial backing in his absence.
He availed a Rs 1 crore term insurance plan when he was blessed with a son a year after marriage; at the age of 28. He wants to get his son admitted to the best school in Bangalore and wants to give him a bright future.
He bought an online term insurance policy of Rs 1 crore at an affordable premium rate of Rs 965 a month; along with a critical illness rider.
However, Shyam suffered a major health problem, a few years after availing the term life plan. He soon succumbed to this illness. His wife held the reins of the family after his death.
She received a lump sum of Rs 1 crore with which she takes care of the immediate family needs and has wisely invested a part of the money. Shyam was able to protect his family and offer financial security even after his death. The Rs 1 Crore payout would have got exhausted in no time; but smart investing helps Shyam’s family enjoy return on return or the compounding benefit.
See Also: Is It Safe To Buy Online Term Plan
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