A 2 crore term insurance policy is a protection plan that extends a robust life cover to the insured’s family members to help them tide over difficult financial conditions with ease. However, such a benefit is extended only in the event of the insured’s death during the policy term under circumstances covered by the term plan.
The high cover value of Rs. 2 crore allows individuals to meet their financial obligations and support their requirements in the absence of their sole breadwinner with ease without straining their savings or seeking external help. Thanks to the high sum, individuals can protect the financial future of their dependents and help them secure their future standing with ease. In addition, the cover value would help them build a robust safety net at a low cost which can later be used to account for daily living expenses, unforeseen expenditures, or future obligations.
These aspects make a 2 crore term insurance plan beneficial for individuals, especially for those with multiple dependents. Hence, individuals seeking high cover and robust support may explore the features of a term plan with two crore insurance.
What are the reasons to purchase a 2 crore term insurance policy?
A 2 crore term insurance tends to act as an important tool when building a financial safety plan for one’s family. For instance, such a plan can help individuals in these ways –
Financial security
The high cover value of two crore helps individuals ensure their family members can lead a financially independent lifestyle long after they are gone. The high amount acts as a safety blanket that would help the dependents meet their sudden and planned expenses with more ease without seeking help from others. This way it helps secure the future of dependents.
Adequate coverage
A crore term insurance plan acts as adequate coverage that can help beneficiaries account for immediate financial obligations arising due to the sudden death of the insured. In addition, the high cover amount helps to meet the financial gap left behind by the insured due to the lack of their income. This aspect proves most beneficial for families with only one breadwinner.
Debt settlement
The substantial cover amount helps the policy nominee meet existing loans, mortgages, and bills without adding pressure. In addition, they can use the cover amount to pay bills and clear debt obligations smoothly without adding to their financial worries.
Future Planning
A high cover amount like two crores can help meet not just immediate but also future expenses and obligations with ease. For instance, dependents can use the cover amount to meet future obligations such as a child’s education, a child’s wedding, or payment towards a big purchase like a vehicle.
Besides these features, the affordable premiums of a 2 crore term insurance plan make it a viable option for many. This is why such a plan proves useful in many cases.
What are the benefits of a 2 crore term insurance plan?
These key features and benefits set a 2 crore term insurance plan apart from the rest –
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Customization of coverage with riders
A rider benefit is an add-on, designed to increase the extent of coverage and enable personalization per individuals’ specific needs. For instance, individuals seeking a high cover value to protect their family’s financial future while also looking for medical cover to safeguard their savings upon diagnosis of a critical illness can purchase a two crore term insurance plan and add a critical illness policy to their base plan.
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Tax benefits with protection
Such an extensive term plan offers a high cover and facilitates tax benefits. To elaborate, under Section 80C of the Indian Income Tax Act, individuals can claim a tax deduction of a maximum of Rs. 1.5 lakh in a year on the total premium amount paid. Additionally, the premiums paid for availing the health riders allow individuals to avail of tax deductions under the provision of Section 80D. Besides these, the 2 crore sum assured disbursed to the policy beneficiary is exempted from taxes under the provision of Section 10(10D).
How to select the best 2 crore Term Insurance policy?
Individuals can select a suitable 2 crore term insurance plan if they factor in a few things beforehand. For instance, these factors can influence the process to a great extent –
Premium amount: Estimating the premium amount for a two crore term plan and then determining whether the same would impact their payment capacity or suit their budget can help plan better. Besides these factors, variables such as an individual’s age, gender, health condition, lifestyle habits, and desired coverage tend to impact the premium amount and may influence the process of selecting a suitable plan. Individuals can use a term plan calculator to estimate the same more effectively and plan their insurance purchase accordingly. Such insight will also help pick a suitable premium payment frequency that would match their paying capacity.
Claim settlement ratio: An insurance company’s claim settlement ratio is a clear indicator of how many claims they resolve in a year. By checking the claim settlement ratio of at least 5 years, individuals can understand whether the insurance company has a track of settling the majority of its claims and settling the same on time. This way it serves as an indicator of the insurer’s reliability and ability to settle customers’ claims. Hence, opting for insurers with high claim settlement ratios could ensure a smooth and hassle-free claim process. Individuals can easily check the insurance provider’s settlement ratio from their official website or check the same from IRDAI’s annual report on the insurance industry.
Who should purchase a 2 crore term policy?
Today plans like a 2 crore term insurance policy act as an ideal investment option for those seeking comprehensive coverage for their family’s future. While any adult can purchase such a plan, some individuals tend to benefit more from its features.
For instance,
- Individuals who have just begun their career and are young can purchase a two crore term insurance plan. Their young age and lack of major financial obligations would allow them to avail of a high cover amount at affordable premiums which they can pay off without straining their limited means.
- Individuals who are the only earning member of their family and have multiple dependents to look after can benefit significantly from a two crore term plan. The high amount will help them build financial protection which will come into force in the event of their untimely death, ensuring their family is protected.
These key features and smart benefits make a 2 crore term insurance plan a suitable protection plan for many. However, it is recommended to check one’s needs and financial capacity first before getting any insurance plan.