Everything you need to know about a Rs. 1 crore term plan
When something unexpected happens to the primary breadwinner or the sole earning member of a family, it could leave the surviving members without adequate financial security. Nobody wants to be caught unprepared in such a situation, isn’t it? To prevent such a misfortune from occurring, it’s always a good idea to invest in a term insurance plan.
Wondering what that is? Here’s a close-up look at what term insurance is all about.
What is a term plan?
A term plan is a kind of life insurance plan that offers coverage to the policyholder. It is a pure protection plan, which is why it’s often the most affordable kind of life insurance available for policyholders. A term plan offers the life cover for a specified period of time. In return for the cover and for the other benefits offered, the policyholder pays the insurer premium. If the insured person passes away during this period, the insurer pays out the sum assured under the plan as the death benefits.
So, the sum assured under the plan is the financial safety net the nominees of the insured person will fall back on. Term insurance plans offer high death benefits, to the tune of Rs. 1 crore or more. And the best part is that it is in return for extremely affordable premiums. And it’s no secret that if you want to secure the future of your family adequately, it’s a good idea to opt for a high sum assured.
If that sounds like something you’re interested in, here’s everything you need to know about a typical Rs. 1 crore term insurance plan.
What are the features of a Rs. 1 crore term plan?
The exact features of a Rs. 1 crore term insurance plan may vary from one policy to another, depending on the insurance service provider. Broadly speaking, however, here are the key characteristics of a typical 1 crore term plan.
Affordability is one of the primary benefits of term insurance plans. In return for cost-effective premiums, term plans offer high life covers. This is particularly true in the case of a Rs. 1 crore term insurance plan. There is no savings component in a term plan, so the premiums are relatively low. If you’re looking for a pure life cover, the Rs. 1 crore term plan may just be the most cost-effective option for you.
The affordability of term plans offering a higher sum assured also makes them accessible for more people. The premium charged for an endowment plan offering a Rs. 1 crore cover is often much higher than the cost of a Rs. 1 crore term insurance plan. So, while the former may be inaccessible for many people with tighter budgets, term plans are for everybody
Don’t like increasing costs? Not to worry. There are many term plans in the market that offer a high life cover in return for steady premiums. The premium payments remain fixed throughout the premium payment term, so you need not worry about increasing costs. This also makes it easy for you to plan your finances early on, since you know the recurring costs are fixed.
On the one hand, steady premiums have their own advantage. On the other, term insurance plans are also flexible enough for people who can afford to pay increasing premiums with age. You can purchase additional cover, over and above what your Rs. 1 crore term insurance plan offers, by simply paying an additional nominal premium. The Aditya Birla Sun Life Insurance Life Shield Plan, for instance, offers you a plan option where you can choose to enhance your sum assured at inception by 5% or 10% per annum.
If you want to secure the future of your loved ones beyond the Rs. 1 crore death benefits, and protect them in case of specific misfortunes, you can choose to add riders to the base plan. For example, ABSLI Life Shield Plan gives you the option to choose many add-on riders such as the accidental death and disability rider, the critical illness rider, the hospital care rider and the surgical care rider. These riders enhance the protection you receive under the term plan in case any of the insured events (like accidents, hospitalization, or a critical illness diagnosis).
So, these are some of the important things you need to know about a Rs. 1 crore term plan before you go ahead and make your purchase. It’s a good idea to get to know the exact features and benefits under the plan you’re going to choose, so you can make the most of the policy. And as you can see, the large cover is not the only key advantage of buying a Rs. 1 crore term insurance plan. There are many other reasons to choose a term insurance plan to protect your loved ones from the uncertainties of life.
ABSLI Life Shield Plan (UIN: 109N109V05) is a non-participating traditional term insurance plan.
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