Financial planning often focuses on goals like buying a home, saving for retirement, or funding a child’s education. These plans usually depend on a steady income over many years. Term insurance plays a key role in protecting these goals by ensuring financial support for the family if the life assured passes away during the policy term. Choosing a higher cover, such as a ₹2 Crore term insurance policy, helps families manage both current responsibilities and future needs with greater confidence.
What is Term Insurance?
Term insurance is a simple, affordable life insurance plan that provides financial protection to your family in case of your death during the policy term. It offers high coverage at low premiums, focusing solely on life cover. If the life assured passes away, the sum assured is paid to the family. In addition to protection, term insurance also offers a term insurance tax benefit on premiums paid and death benefits, subject to applicable tax laws. Typically, there is no maturity benefit unless a Return of Premium variant is chosen.
Why Consider a ₹2 Crore Term Insurance Plan?
Many people wonder whether they really need a cover of ₹2 Crore. While it might sound like a big number today, you must consider inflation and the rising cost of living over the next 10, 20, or 30 years. Here is why a ₹2 Crore term insurance plan is beneficial:
Financial Security for Your Loved Ones
For families that depend on one or two earning members, income replacement is critical. Daily expenses, school fees, rent or EMIs, and household costs continue even if income stops. A higher sum assured allows the family to manage these expenses over several years, providing stability while they reorganise their finances.
Debt Coverage
Many families carry long-term liabilities such as home loans, education loans, or business-related borrowings. If these loans remain unpaid, they can place a financial burden on dependents. A higher cover ensures that outstanding liabilities can be cleared while still leaving funds for living expenses and future goals.
Securing Your Child's Future
Education inflation in India is rising rapidly. The cost of a professional degree today could double or triple over the next decade. A sufficient term plan ensures that your child’s education, whether it’s school fees or higher studies abroad, does not suffer because of a lack of funds. It can also help cover expenses for their marriage or other life milestones.
Tax Benefits
Apart from protection, term insurance offers tax efficiency.
Section 80C: You can claim deductions of up to ₹1.5 Lakh per financial year on the premiums paid for your term insurance.
Section 10(10D): The death benefit received by the nominee is generally tax-free under Section 10(10D) of the Income Tax Act, 1961, subject to conditions mentioned therein.
These term insurance tax benefits make it a dual-purpose instrument—protection plus tax savings.
Factors to Consider Before Choosing a Term Insurance
Selecting the right plan requires some calculation. You shouldn't just pick a random number. Here are factors to keep in mind:
Age and Coverage
Buying early usually means lower premiums. Younger individuals can lock in long-term coverage at a lower cost. Coverage should also factor in inflation and future expenses.
Policy Term
The policy term should ideally cover working years and major financial responsibilities. For example, someone planning to retire at 60 may consider a policy term that lasts until that age or slightly beyond if liabilities continue.
Riders for Additional Protection
Optional riders can strengthen protection when chosen thoughtfully:
Critical illness rider
Accidental death benefit rider
Waiver of premium rider
These riders add value when aligned with personal risks.
Claim Settlement Track Record
Reviewing an insurer’s claim settlement record helps ensure that dependents face fewer difficulties during the claim process.
How to Buy Term Insurance?
Buying term insurance is simple, especially through online platforms.
Research and Compare
Compare insurers on premium cost, claim settlement record, service quality, and available riders to find a plan that fits your needs.
Use a Term Insurance Calculator
Online calculators, such as those offered by established insurers like Bajaj Life Insurance, help estimate the right cover and tenure based on income and liabilities.
Online Purchase
Buying term insurance online is usually more cost-effective as it removes intermediary costs. The process is quick, paperless, and straightforward.
You typically need to:
Visit the insurer’s official website
Enter basic details such as age, income, and lifestyle habits
Select the sum assured (for example, a ₹2 crore term insurance cover) and policy term
Add relevant riders, if needed
Complete payment and schedule medical tests, if applicable
Conclusion
A ₹2 Crore term insurance plan is a tool for financial protection for your family's peace of mind. It ensures your loans are paid, your children's education is secured, and your spouse lives comfortably. By assessing your lifestyle, liabilities, and future goals, you can choose a plan that offers the right protection. Take the first step today to secure your loved ones with a robust financial safety net.