Life insurance has become a crucial aspect of financial planning. Additionally, if you are the sole breadwinner in your family, it becomes more crucial to have an insurance policy. In case of any emergency, it will help your dependents to lead a decent life even in your absence. Here comes the ₹2 crore term insurance plan.
With this significant coverage amount, your family will not have to struggle for basic requirements and necessities like education.
Understanding What 2 Crore Term Insurance Means
A ₹2 crore term insurance plan, in very simple terms, is a life cover of ₹2 crore for a fixed duration known as the policy term. As per the plan, you pay a premium. In case of your demise during the tenure, your nominee gets the sum assured of ₹2 crore payout.
Why 2 Crore Might Be the Right Cover for You
The right amount of cover depends on your income, your family’s needs, and your existing savings. A ₹2 crore cover is often chosen by people who:
- Have a high monthly expense due to lifestyle or responsibilities.
- Want to cover big financial goals like a child’s higher education or marriage.
- Have loans such as a home loan or business loan.
- Is the only earning member of the family.
Even if you think this amount is more than what your family might need, remember that inflation will reduce the value of money over time. ₹2 crore today may not feel like the same amount 15–20 years later. So, choosing a higher cover can be a smart way to secure your loved ones’ future.
How Premiums Work for 2 Crore Term Insurance
The premium you pay for 2 crore term insurance depends on factors such as:
- Your age at the time of buying the policy.
- Your health and medical history.
- Whether you smoke or drink alcohol.
- The length of the policy term.
- Additional benefits or riders you choose.
Younger people usually get much lower premiums because they are considered lower risk. For example, a healthy 30-year-old non-smoker will pay much less than a 45-year-old smoker for the same cover. This is why it is advisable to buy term insurance at your early age.
Choosing Between Different Plans
When you compare different plans, you should not only look at the premium. A plan with a lower payout range may not give you all the benefits you need for your family. On the other hand, a slightly higher premium might give you more benefits, flexibility, and peace of mind.
Look at the claim settlement ratio of the insurer. This shows how many claims they approve compared to the number of claims they receive. A higher ratio means a higher chance your dependents will get the payout without trouble.
If you are exploring providers, Axis Max Life offers a range of term insurance options that can be customised based on your income, goals, and lifestyle needs. While the premium is important, choosing a reliable insurer with a strong record is equally essential.
How long should your policy term be?
Your plan should last until your money duties, like loans or family needs, are finished. For example, if your children are young, you may want a policy that runs until they finish their education and start working.
Some people prefer taking cover until their retirement age so their spouse is financially safe even if something happens before they retire.
Riders – Extra Benefits for More Protection
Riders are add-ons to your main term plan that give extra benefits. Even though they require additional cost, they can provide benefits that can save you a lot of money.
Below are the riders that are very common:
- Critical illness rider – It gives a lump sum if you are diagnosed with a serious illness like cancer or heart disease.
- Accidental death benefit rider – Gives an extra payout if you die in an accident.
- Waiver of premium rider – Stops your future premium payments if you are unable to work due to disability.
Adding the right riders can make your policy more useful. For example, a person who travels a lot by road might consider an accidental death benefit rider.
Claim Process – Easy for Your Family
One of the main reasons for buying term insurance is to ensure they receive money quickly and easily when they need it most. Before buying a policy, check how simple the claim process is. Some insurers have fully online claim processes, while others need physical documents.
Make sure your family knows about the policy, the insurer’s contact details, and where the policy documents are kept. This avoids delays during difficult times.
How to Use an Online Calculator Before Buying
Before finalising your two crore term insurance plan, it’s a good idea to use an online income tax calculator and an insurance premium calculator. The insurance calculator will tell you the exact premium you’ll pay based on your details. This helps you choose a plan that fits your budget.
Many insurers, including Axis Max Life, offer these tools for free on their websites. You just enter your age, income, policy term, and cover amount, and the calculator shows you the premium instantly. This makes comparing plans much easier.
The Role of Tax Benefits
The premiums you pay for term insurance can be claimed as a tax deduction under Section 80C (up to ₹1.5 lakh a year in the old tax regime). The sum assured your nominee gets from the policy is usually tax-free under Section 10(10D), if the conditions are met.
(The discussed tax benefits don’t fall under the new tax regime.)
Conclusion
When it comes to choosing a term life insurance plan, people mostly look for the one with the lowest premium. But also, it comes with finding the right cost, coverage and features. Choose the plan which covers your family’s needs, future goals, and protection for your entire family.
You can use online calculators too for your convenience, as they can also help you with exact calculations, which can help you plan your premiums.