It is no secret that inflation has been on the rise. Keeping the increasing expenses in mind, imagine how difficult it will be in the future for your family in case something happens to you. Unlike insurance, life doesn’t come with a policy term. You cannot promise the future, so you might as be prepared for it for the sake of your family.
We are talking about getting a 1 crore term insurance here. Term insurance can ensure that your family is well taken care of financially after you are gone. But the question remains, why 1 crore term insurance?
Let’s understand in detail.
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- It is a Sizeable Insurance Cover
Whether it is your children’s education or marriage, the future is packed with heavy expenses that your life savings alone cannot support. A 1 crore term insurance is a sizeable amount that can help your family cover all such necessary expenses with ease.
At the same time, it can help your family cope with the financial burden of medical emergencies. Medical treatments are getting costly every day. God forbid, if such a burden falls on your family, at least with a 1 cr term insurance plan, they would be able to get the necessary financial support in a time of need.
- It Takes Care of Inflation
If there’s one thing that can be said with conviction is that the inflation rate cannot ever be on the standstill. In other words, the cost of living is only going to get higher. Thankfully, a 1 crore term insurance plan can reduce the impact of inflation on your finances. As said before, it is a sizeable amount that can be used by the nominee (nominee meaning – the person receiving the benefits in your absence) to live their life comfortably even when the cost-of-living increases in the future.
- Low Premium
As standard term insurance plans do not come with survival benefits, term insurance is one of the most affordable insurance instruments out there. When compared to a standard life insurance policy, term insurance premium is very low.
With a 1 cr term insurance plan, one can get sizeable insurance coverage at a highly affordable premium. Additionally, this premium can get even lower if you buy it at a younger age. As the probability of health issues increases with the age, premium increases along with it. But you can save yourself from the extra premium if you buy a 1 crore term insurance just in time at a young age.
- Aids Financial Planning
When you know that your family is taken care of financially with a 1 cr term insurance plan, you have the liberty of spending your money to a much better purpose – say investment.
For a lot of people, building a good investment portfolio is a far-fetched reality because they think doing so might affect their savings. Investment is a great way to accumulate wealth and increase your life savings. With a 1 cr term insurance, you can consider investing freely.
- Gives You the Benefits of Riders
A 1 cr term insurance policy is a basic insurance policy that can be topped with riders. Riders are benefits you can get in exchange for nominal premium payment. Riders differ with insurance companies. In other words, different insurance companies provide different riders. However, the basic riders one can include critical illness rider, waiver of premium, accidental death benefit, etc.
Taking the first rider, for instance, a critical illness rider ensures that your family gets extra coverage if the policyholder is diagnosed or dies with a critical illness such as cancer, stroke kidney failure, or heart disease.
Buying riders is not necessary but it is highly recommended as it can increase your benefits and help you save more.
Things to Know About Before Buying a 1 Crore Term Insurance Plan
All Deaths are Not Covered by Term Insurance
All kinds of natural deaths are insured by a term insurance plan. However, deaths caused by suicide, drugs, and alcohol overdose, HIV aids, are not insured. At the same time, deaths caused due to adventure activities and natural calamities are also not covered by a term insurance plan.
Your Premium Can Cost Higher if You’re a Smoker or Heavy Drinker
As smoking and drinking can cause various health issues, policyholders who drink and smoke may have to pay a higher premium than those who don’t.
That said, it is important to be transparent about your lifestyle habits. Any non-disclosure can affect the claim settlement.
Getting a 1 crore term insurance is a smart step towards reliable financial planning. However, before you buy term insurance, ensure that you know your rights as a policyholder.