If the sole breadwinner of any family faces an untimely demise, it is a major loss not only in terms of emotion but financially, too. The simple standard of living also gets grossly affected. However, a prudent financial portfolio will never let you face such challenges alone. You will receive financial protection to handle such challenges.
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What is a 10 Crore term insurance?
A 1-crore term plan is a relatively popular plan in our country. However, 10-crore term insurance is gaining rapid popularity. This allows you to enjoy sufficient financial protection to the designated nominee of the concerned policyholder.
The chief advantage of this term plan is that you enjoy a much higher sum assured without much pocket pinch. Such a higher sum assured aids in fulfilling the financial needs of your beloved family members despite your absence.
Advantages of 10 crore term insurance
We understand well by now that having a 10-crore term insurance plan is a smart move. Some of the major advantages of having this sort of term plan include the following:
- Death benefit: This type of term plan allows death benefit to the beneficiary or the designated nominee after the unfortunate demise of the concerned policyholder during the policy term.
- Financial security: A term plan offers competent financial protection to your family members under unfortunate and challenging circumstances. It acts as a protective shield to take care of several financial responsibilities and liabilities.
- Tax benefits: You can enjoy tax benefits for the premiums paid towards this sort of term plan u/s 80C of the IT Act, 1961. The IT benefit limit is up to INR 1.5 lakhs per financial year.
How do you choose the right 10 crore term insurance plan?
Because of the increasing popularity, several insurance companies are offering 10 crore term insurance plans. It can be a 15-year term insurance plan. You must clarify all your doubts and ambiguities before you invest in a long-term plan. Some of the major factors that you need to consider in this respect include the following:
- Life objectives: The initial target for buying a 10-crore term life plan is to ensure enhanced financial protection for your family during your absence. This aids your family in enjoying the basic financial support necessary to sustain it by maintaining a basic living standard.
- Age: Financial necessities change and evolve with time and age. The financial requirements at your younger age will vary significantly from your set of financial priorities at an advanced age. However, if you purchase a term plan at a younger age, you need to pay a lower premium rate without compromising on the coverage.
- Liabilities: Before zeroing in on any particular plan, you must first analyse your financial responsibilities and liabilities. Once this point is clear, your targets will be automatically revealed, determining if a 10-crore term plan will prove to be sufficient.
- Annual income: Your yearly income is a major determinant in deciding if you need a 10-crore term plan or not. Your annual income must be sufficient enough to pay the premiums punctually without burdening your pocket.
- Estimated working years: The plan coverage amount of a life insurance plan must ideally correspond to the premium payable amount that you can easily handle throughout your service.
Exclusions
Although a 10-crore term insurance proves to be beneficial in multiple ways, there are certain drawbacks that you must remain aware of before purchasing the plan. Although the list of exclusions may vary from one plan to another and insurer to insurer, certain standard exclusions include the following:
- Death due to participation in suicide or dangerous activity: Insurers will reject your claim of paying the lump sum death benefit amount if the death of the concerned policyholder happens under specific circumstances like suicide or voluntary participation in hazardous activities.
- Death due to criminal activities: If the policyholder dies due to involvement in illegal and criminal activities. Under such circumstances, no riders will be allowed coverage. The nominee will not receive any death benefit.
- Death due to intoxication: Most insurance companies refuse coverage protection if the policyholder dies due to the influence of any sort of intoxicant like alcohol, drugs, etc. Considering the company’s rules and regulations, the insurer will not pay the death benefit.
- PEDs: Before you buy a term life plan, you must clarify and mention your entire medical history. If you fail here, you might not receive insurance coverage under such specific circumstances.
Conclusion
Prices and the cost of living will rise with time. The influence of inflation cannot be denied. However, if you keep this vital fact in mind while planning and designing your financial portfolio, it is best to stay protected with a large amount of sum assured. This will help you fulfil your financial targets eventually without much difficulty or burdening your family members.
