What is ₹2 Crore Term Insurance?
A ₹2 crore term insurance plan is a life insurance policy that provides a lump sum payout of ₹2 crore to your nominee/s in case of your unfortunate demise during the policy term. The payout is,subject to the circumstances of the claim and the terms of the policy. The core purpose of a ₹2 crore term insurance plan is to ensure your family gets a substantial financial safety net when they need it the most.
Term insurance is popular because it offers a high coverage amount at a relatively low cost. This type of term life insurance offers pure protection, meaning there are no maturity benefits unless you choose them. Policyholders can customise their ₹2 crore term plan by paying an extra amount for additional features or riders such as critical illness cover, accidental death benefit, or waiver of premium for enhanced protection. When chosen thoughtfully, the best term insurance plan for 2 crores can help your family meet both short-term needs and long-term life goals when you are no longer around.
Why Buy a ₹2 Crores Term Insurance Plan?
Comprehensive Financial Protection
- A ₹2 crore term insurance plan provides significant financial protection for the family in the unfortunate event of the policyholder’s passing. It ensures the family remains financially stable in the policyholder’s absence and is able to cover living costs, EMIs, and other day-to-day expenses.
Support for Long-term Goals
A ₹2 crore term plan can help the policyholder’s family meet long-term goals like children's education, marriage, and retirement planning without any financial stress.
Ideal for High-income Individuals
Opting for a ₹2 crore term insurance plan is particularly beneficial for policyholders involved in high-risk, yet well-paying professions or in areas with a high cost of living.
Covers Major Liabilities
Term insurance for ₹2 crore can help settle home loans, car loans, personal loans, and credit card debt, thus ensuring your family does not have to bear the burden.
Optional Savings Element
You can also customise the ₹2 crore term insurance plan with a return of premium option, wherein you receive your total premiums back at the end of the term if you survive. This adds a savings element to your plan while still ensuring core life cover.
Peace of Mind
By opting for a high-coverage term life insurance plan, you can enjoy emotional and financial peace of mind knowing that your loved ones are safeguarded with adequate coverage.
How Does a ₹2 Crore Term Insurance Plan Work?
A ₹2 crore term plan operates on the principle of pure protection:-
Premiums Payments
You pay regular premiums to the insurance company on a monthly, quarterly, annual, or one-time basis depending on your selected payment option. Premiums are determined based on your age, health, lifestyle habits, and policy term. You can use a term insurance calculator to estimate the premiums.
Customisation Options
You can enhance your plan with add-ons like critical illness cover, accidental death rider, or income payout options to suit your family’s needs.
Coverage Period
The ₹2 crore term insurance plan provides coverage for a specified period, known as the term.
Death Benefit
If the life assured passes away during the term, the nominee receives a death benefit of ₹2 crores from the insurer, provided all conditions are met and premiums were duly paid.
No Maturity Benefit
Unlike some other life insurance plans, term plans do not offer maturity benefits if the life assured survives the term. This is unless you have opted for a ₹2 crore term plan with a return of premium feature.
What are the Benefits of a ₹2 Crore Term Insurance Plan?
Here are some of the reasons why a ₹2 crore term plan can be beneficial for you:-
Affordable Premiums
Term plans are cost-effective compared to other insurance products. Even with a high sum assured, term insurance plans for 2 crore offer cost-effective premiums, especially when purchased early.
High Coverage
These plans offer substantial coverage at a relatively low premium. For individuals earning well or supporting dependents, a ₹2 crore term plan ensures that their family can maintain the current standard of living in their absence.
Financial Security
A ₹2 crore term insurance also ensures financial stability for your family in your absence. The lump sum payout can help your family meet daily expenses, repay existing debts, and fund long-term goals like higher education, medical care, or marriage expenses.
Tax Benefits**
As per prevailing laws, you can claim deductions of up to ₹1.5 lakh under Section 80C for premiums paid, under the old tax regime. In addition, the death benefit received by your nominee is tax-free under Section 10(10D), provided conditions are met.
Flexibility in Payout
You can choose how your nominee receives the term life insurance payout. It can be either as a lump sum, monthly income, or a combination of both, depending on what suits your family’s future best.
Customisation through Riders
You can enhance your term life insurance plan with riders like critical illness cover, accidental death benefit, and waiver of premium on disability or terminal illness to ensure your policy offers protection against more than just mortality.
Return of Premium Option
If you opt for a ₹2 crore term plan with the ROP benefit, you receive your premiums back if you survive the term. This way, you not only get life coverage but also an element of savings within the plan.
Who Should Buy a ₹2 Crore Term Insurance Plan?
A ₹2 crore term insurance plan can help anyone with long-term financial responsibilities and dependents. Here are some profiles that may benefit the most:-
Primary Breadwinners
If you are the sole or main income earner in your family, a term life insurance plan with a ₹2 crore sum assured ensures your loved ones can sustain their lifestyle even in your absence.
Young Professionals
Buying a ₹2 crore term plan early ensures lower premiums and long-term coverage. It is ideal for IT professionals, doctors, or entrepreneurs planning for family protection from an early stage.
Individuals with High Financial Liabilities
If you have large home loans, education loans, or other debts, this sum assured protects your family from inheriting those obligations.
Parents of Young Children
The best term insurance plan for ₹2 crores can ensure that your child’s education, healthcare, and future aspirations are taken care of even if something happens to you.
People Living in Metro Cities
Due to higher living costs, individuals in metros may require a higher sum assured like a term insurance plan for ₹2 crores to provide realistic financial security.
If your current lifestyle and future commitments demand solid protection, a term insurance plan for ₹2 crore may be right for you.
How to Choose the Right ₹2 Crore Term Insurance Plan?
Choosing the best term insurance plan for ₹2 crore involves consideration of several factors. Here are a few tips to guide you along the way:-
Step 1. Assess Your Needs
Evaluate your family's financial needs, liabilities, and future goals. Also, consider future expenses like your child’s education or your spouse’s retirement plans. A general rule is to consider a sum that is at least 10-15 times your annual income.
Step 2. Use a Term Insurance Calculator
An online term insurance calculator helps estimate the premium you will pay based on variables like age, lifestyle, and policy term. It can also help compare multiple plans and calculate the ideal sum assured.
Step 3. Compare Plans
Use online comparison tools to compare different ₹2 crore term plans based on premiums, features, and benefits. Look for value-added benefits, such as the return of premium feature and flexible payout options to ensure you have the best term insurance plan for ₹2 crore that suits your needs.
Step 4. Check Claim Settlement Ratio
Choose an insurer with a high claim settlement ratio. It can ensure your family's claim is honoured promptly in your absence.
Step 5. Review Riders and Add-ons
Consider additional riders such as the critical illness cover, the accidental death benefit, or the waiver of premium rider to enhance your ₹2 crore term plan.
Step 6. Choose the Policy Term and the Premium Payment Term
Select a policy term that aligns with your financial goals and obligations. In addition, choose a premium payment option - monthly, quarterly, or annually, based on your financial comfort.
Step 7. Check the Documentation
Ensure you have valid ID proof, income papers, address proof, age proof, and other documents required for term insurance ready to speed up the application process.
Want to calculate the premium amount for your ₹2 crores term insurance plan? Do it with an online calculator here!
Documents Required for ₹2 Crore Term Insurance
Here’s a list of documents required for a term insurance plan for ₹2 crore:-
Proof of Identity:
Aadhaar Card, PAN Card, Passport, Voter ID, or Driving License.
Proof of Address:
Utility bills, recent bank statements, Aadhaar, Passport, or Voter ID.
Proof of Age:
Birth certificate, Passport, PAN, Aadhaar, etc.
Income Proof:
Salary slips, Income Tax Return, Form 16, or the last 6 months’ bank statements.
Medical Reports:
Health check-up or medical examination reports, if required.
The list of required documents can vary. Always check the insurer’s specific list of documents required for term insurance during application.
Will the ₹2 Crores Term Insurance Payouts Be Taxed?**
₹2 crores is a significant amount. Hence, many may wonder about the taxation aspects of the payout from a ₹2 crore term insurance plan.
Under Section 10(10D) of the Income Tax Act, 1961, the payout received by the nominee in case of the policyholder’s death is completely tax-free, provided certain conditions are met.
This means that all the proceeds received on the demise of the insured including the death benefit payout, any incentives, or surrender values, are not subject to income tax. However, it is essential to ensure that the premiums paid do not exceed 10% of the sum assured to qualify for this exemption.
In addition to the Section 10 (10D) tax exemption, the policyholder also enjoys tax deductions against the premiums they pay for their term life insurance plan. Furthermore, policyholders can also avail tax benefits under Section 80D up to ₹25,000 (for those under 60 years of age) and ₹50,000 (for those above 60 years), if their term insurance includes health-related riders such as critical illness rider.
Always consult a tax advisor to ensure compliance and optimise your deductions.
Why Buy ₹2 Crores Term Insurance Plan from IndiaFirst Life?
Opting for a ₹2 crores term insurance plan from IndiaFirst Life comes with several advantages. Some of these are:-
Comprehensive Coverage: Provides extensive coverage to secure your family's future.
Competitive Premiums: Offers affordable premium rates for high-value coverage.
Additional Riders: Availability of various riders to customise your policy.
High Claim Settlement Ratio: Ensures a hassle-free claim process with a high claim settlement ratio.
Flexible Payment Options: Multiple premium payment options to suit your financial plan.
Customer Support: Robust customer support for policy management and claim settlement.
Need help in choosing the right life insurance plan? Call us now at 8828840199 or book a call here.
Frequently Asked Questions
Eligibility Criteria
What are the eligibility criteria to purchase a ₹2 crores term insurance plan?
You have to be at least 18 years of age to purchase a term life insurance plan, irrespective of the sum assured you are trying to secure. Check the eligibility criteria of the term policy you seek to ensure that you may be able to get the plan. While the final approval lies with the underwriting team, everyone who is eligible for a regular term plan may apply to buy a ₹2 crores term insurance plan.
Sum Assured
How do I know if ₹2 crores sum assured will be sufficient?
An ideal sum assured for life insurance is a value that includes 10-15 times your annual income plus all your liabilities. You can calculate this manually, using an online term insurance calculator, or have an expert do it for you.
Is ₹2 crore term insurance worth it?
Yes, a ₹2 crore term insurance policy can be worth considering, especially if your aim is to ensure comprehensive financial protection for your loved ones in your absence. The best term insurance plan for ₹2 crore can help take care of dependent family members, long-term loans (like a home loan), children’s education, and more in your absence.
Premium
You can either use an online term insurance calculator or consult an insurer representative to help you with the same.
What happens if the life assured survives the policy tenure?
If you have opted for a level term life insurance policy and survive the policy tenure, there are no maturity benefits of term insurance to be claimed. However, if your plan has a return of premium option, you may claim the premium return upon plan maturity. The latter option is suitable for those who want protection along with some form of savings.
Riders
Which riders are available with the ₹2 crores term insurance plan?
Availability of riders depends on the term life insurance plan chosen. You can check which riders can be added to your plan of choice. Common options include accidental total and permanent disability, premium waiver, income benefit, critical illness, and more.
** Tax exemptions are as per applicable tax laws from time to time.
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