The most cost-effective and sure-shot strategy for securing your family’s monetary future is through term insurance. Within the horde of varying plans, a ₹1 crore term insurance plan is one of the largest in demand among the elites who seek high security at relatively low premiums. How much, then, does a ₹1 crore term insurance premium cost, and what determines the same? Let us discuss this basic financial product in rather greater depth as far as its price determinants are concerned.
What is Term Insurance?
It is a type of life insurance product that provides the policyholder’s family the financial security from the insured’s death before completing the term. Unlike any other life insurance product, term insurance is all about risk coverage and offers no maturity benefits. It is, therefore, a very cheap product in comparison to any other form of life insurance plan.
Why get a term insurance cover for ₹1 crore?
The sum assured of ₹1 crore provides good financial support that can be sustained for quite a long period, in case of an unfortunate incident happening to you. The corpus can be pretty handy at the right time to meet some critical expenses like:
- Domestic expenses: To continue the same lifestyle
- Loan Repayment: Repayment of a loan, which could be a pending home or a car loan.
- Children’s education expenses: Giving your children the opportunity to pursue higher education
- Unexpected medical emergencies.
Coming from a high coverage and pretty low premiums, a ₹1 crore term insurance plan has emerged as a favourite among young professionals as well as families.
Factors that Influence ₹1 Crore Term Insurance Premium
It pays to know what a ₹1 crore term insurance premium depends upon. Let’s break it down:
- Age: It forms one of the biggest contributing factors that influence term insurance. Youthful ages pay largely cheaper prices since a young age is normally assumed to have minimum chances of ever claiming with this life insurance coverage because of healthy long lives.
- Health Condition: The premium is directly proportional to the health condition. In some cases, the insurer may also ask for a medical test to know about your health condition. Those with previous critical illnesses or existing health conditions cost more.
- Lifestyle: If you smoke, drink, or do anything hazardous habit then you may get charged with high premium. For example, smoking person pays roughly double the amount of premium that a nonsmoker pays.
- Policy Tenure: Premium is also dependent upon the policy tenure. Higher the tenure, high is the premium but actually the higher the tenure covers for a long period of time.
- Gender: Another astounding fact. Women get relatively lesser premiums largely because they are assumed to live longer than men.
- Occupation: Hazardous occupations such as mining, aviation or off-shore drilling command higher premiums.
- More Rider: Other additional riders can provide critical illness cover, and accidental death benefits along with a waiver of premium to increase the cost of your term insurance policy.
What will be the term insurance premium on a ₹1 crore?
Actual cost of ₹1 crore term insurance premium may vary with these parameters; however, here are some suggestions that may help in gauging:
- Non-Smoker in his 20s: ₹ 600 – ₹800 per month for a 30-year policy.
- Non-Smoker in his 30s: ₹1,000-₹1,200 per month for a 30-year policy.
- Smoker in his 20s: ₹1,200-₹1,500 per month for a 30-year policy.
- Smoker in his 30s: ₹1,800-₹2,200 per month for a 30-year policy.
These are very approximate figures and may vary from company to company and policy to policy.
How to Select the Best ₹1 Crore Term Insurance Plan
This is far more than a mere term insurance premium comparison. Here’s how it works:
- Claim Settlement Ratio (CSR): CSR indicates how many claims the insurer has settled, in proportion to the total claims. Higher or higher CSR reflects that it is a better insurance company.
- Premium: Yes, it is not too expensive but the benefit and coverage provided should be worth that premium.
- Policy features and riders: Consider what features and riders are available for tailoring the policy to meet your needs.
- Customer service: Go for an insurer who is famous for great customer service and a hassle-free claims process.
- Solvency Ratio: It is the ratio that determines the financial capability of the insurance company to honor the claims paid. A Solvency of more than 1.5 is considered almost safe.
Benefits of a 1 Crore Term Insurance
There are hundreds of reasons why 1 crore term insurance is gaining popularity, along with the above-mentioned benefits:
- Cover at a minuscule Premium: It provides a fair amount of life insurance at a pitiful cost.
- Tax benefits: The premium paid towards term insurance plans is exempted under section 80C of the Income Tax Act and the death benefit is not taxable under section 10(10D).
- Riders: This helps you to make personalized decisions so that you can enhance the coverage of your policy.
- Peace of mind: You cannot measure the peace of mind you feel when you know that your family is set for the future from a financial perspective.
How to Save on Term Insurance Premium
- Buy Early: The earlier you buy, the lesser your premium is.
- Healthy Lifestyle: Quit smoking and maintain a healthy lifestyle for reducing your premium.
- Right Insurer: Compare multiple insurers and get the best premium for your requirements.
- Pay Annually: Paying premiums annually is more economical than monthly or quarterly payments.
- Opt for a Tenure That Works Best For You: Do not go for very long tenures if you are confident that you will be financially sound by the due date of maturity.
Conclusion
The best way to save your future for your family without breaking into your piggy bank is with a term insurance of ₹1 crore. The premium paid is mainly based on the age, health, lifestyle, and tenure of the policy; hence, this is very cheap for most people. Therefore, if one knows more about term insurance and then selects plans that a person actually needs and has according to their pocket can go a long way in benefiting an individual.
So, in case you would like securing an excellent financial safety net for your family, look for possibilities for the present about ₹1 crore term insurance plans. So sit tight, have your family wellbeing assured and sit peacefully with a right policy.