1 Crore Term Insurance

 What is a 1 Crore term insurance plan?

A 1 cr term insurance is a type of life insurance that offers a sum assured of Rs. 1 crore. Just like any other term plan, it is the purest form of life insurance. You pay premiums regularly for a specific time period known as the policy term. Since it is a term insurance of 1 crore, in the unfortunate event of your demise during the policy term, your nominee (chosen beneficiary) will receive Rs. 1 crore. This significant amount ensures the financial security for your family in your absence. As it is a pure risk coverage you won’t receive a payout if you outlive the policy term. 

How does 1 Crore term insurance work?

1 crore term insurance works on a simple principle of providing an enough financial safety net to your loved ones in exchange for regular and affordable premiums. Here is an example to help you understand on how it works in India:

1. Selecting the plan and life coverage (sum assured)
 

• Sum assured :

  Basis annual income, liabilities, future financial goals and current savings & investments, Ravi decides he needs a term insurance of 1 crore. On Ravi’s demise, his family will receive a payout of 1 crore.

• Policy term:

  To cover for his earning years and the time until which he will have major financial responsibilities (home loan repayment, child’s education and marriage) Ravi would need a cover till the age of 60 years (you can also opt till 85 years if needed).

• Premium paying term :

  Ravi is a salaried professional, so he decides to pay premium annually (regular pay) till the policy term. You can also choose either limited pay (pay for a shorter duration – 5,10,15 years) or single pay (pay as a lump sum) options.

• Premium calculation :

  Ravi uses the term insurance premium calculator and based on his age, gender, smoking habit, sum assured, policy term and premium paying term he gets to know the estimated term insurance premium for 1 crore.

• Adding riders :

  Along with his base term plan Ravi also decides to add the critical illness rider and return of premium rider to his policy in order to enhance the financial cover and get his premium back respectively. You can choose any rider such as waiver of premium, accidental death benefit etc. as per your need.

• Nominee :

  As Ravi is married, he chooses his wife to be the nominee (you can also choose your parent or child). On his demise, his wife will receive a payout of Rs. 1 crore.

2. Application form and underwriting process
 

• Application form :

  In this step Ravi provides his personal details, income information, medical history and other required information to the life insurer.  

• Medical tests :

  After receiving all details from Ravi the insurer assigns medical tests for the term insurance to get an understanding of Ravi’s current health condition.

• Underwriting :

  Basis the information provided by Ravi and his medical test reports the insurer decides to approve this application at a specific annual premium (the insurer may also decide to reject the application or increase the premium).

3. Issuance and premium payment

• Policy issuance :

  Once Ravi’s application was approved by the insurer and he paid his first-year premium, his term policy was issued.

• Free-look period :

  Once the policy is issued Ravi has 30 days (since bought online) to review the terms and conditions of the policy and return it if not acceptable. The period of 30 days is known as the free-look period. It is 30 days if the policy is bought physically.  

• Premium payment:

  Since Ravi had selected the annual premium payment mode, he needs to pay his premium on a fixed date (due date) every year till his premium paying term (till 60 years). The premium that Ravi pays are also eligible for tax deductions under section 80C of the Income Tax Act, 1961¹ up to the limit of Rs. 1.5 lakh. Since Ravi has purchased, HDFC Life Click 2 Protect Super he has a window of 30 days (starting from the due date) to pay his premium in case he isn’t able to pay it by the due date. This window of 30 days is known as the grace period. During the grace period his policy remains active. In case the premium payment mode is monthly, then the grace period is 15 days.

4. Payout of the sum assured

• Death benefit :

  In case of Ravi’s demise during the policy tenure his wife (the beneficiary) will receive the tax-free (under section 10(10D) of the Income Tax Act, 1961¹) sum assured of Rs.1 crore.

• Survival benefit :

  Since term insurance is pure risk coverage, you won’t receive any payout if you survive the policy tenure. But since Ravi had opted for, term insurance with return of premium he will get back 100% of the premiums paid if he survives the policy tenure. 

• Rider payout :

  In case Ravi is detected with a critical illness during the policy term, he will receive an upfront payment (sum assured of the critical illness rider).

Why Do You Need 1 crore term insurance Plan?

Considering the rising cost of living, inflation, and the growing monetary responsibilities,  term life insurance  of 1 crore has become a necessity. The sum assured of 1 crore will help your family manage the daily expenses, repay debts, meet education expenses, and fulfill other long-term goals in your absence.   Using the term insurance calculator helps you understand the premium required for a 1 crore term insurance policy. It allows you to plan effectively to safeguard your family's financial stability. 

• Securing Your Family’s Future Lifestyle

Given the rising costs and inflation, the 1 crore term insurance will help your family to maintain their lifestyle for some years if you are not around. It is a smart choice for individuals with multiple dependents and long-term debts. 

Income Replacement :
 

A 1 crore term insurance plan can prove to be a smart choice to replace your income (in your absence) as it offers an option to receive the payout as lump sum, regular income, or a combination of both. It, therefore, helps to manage household expenses.

Adjust for inflation :
 

Inflation erodes the purchasing power of your money in the long-term. India’s year on year urban inflation based on Consumer Price Index (CPI) stands at 3.07% as of May,2025. This means at the same inflation rate a sum of Rs. 10,00,000 be worth only Rs. 5,39,700 in two decades. While deciding on the sum assured of your term insurance you should consider the fact that how much the sum assured will be worth over the long-term in case of your demise. An adequate coverage of a 1 crore term plan will ensure that your family can cope with inflation and sustain their lifestyle.
 

• Covering Major Financial Liabilities

If you have outstanding loans such as home loans, education loans, car loans etc., the payout of Rs.1 crore from a term plan on your demise will help your family pay the loans on time.

Home Loan 
 

Home loans are a huge financial responsibility and involve years of EMI. In case of the primary breadwinner’s death, the burden of the loan falls on the family. With the payout of the 1 Cr term insurance the family can pay the home loan without any financial stress.

Car Loan
 

EMIs for car loans are sizeable payouts from your income. In case of your demise and absence of income your family will have to bear the financial burden to pay the remaining EMIs of the car loan. The death benefit of a 1 cr term plan will help your family repay the car loan.     

Other Debts
 

High-interest loans, such as personal loans or outstanding credit card bills can cause financial stress for your family in case of your absence. The sum assured of a 1 crore term insurance plan ensures that the burden to pay off the debt will not be passed on to your family in case of your demise. 

• Funding Children's Future Goals

A 1 crore term insurance policy secures your children’s future goals in your absence despite the rising costs. The lump sum payout received on your untimely demise will help your family fund the expense for school, college, and higher studies with ease and safeguard your child’s academic journey. 

Education
 

According to a recent report by LocalCircles, 44% of the parents surveyed say their children’s schools have increased fees by 50-80% or more between 2022 and 2025.   Year-on-year Education inflation rate for the month of May, 2025 is 4.12% in India where as the Consumer Price Index is only at 2.82% in the same time period. Under such a situation, for your child’s future dreams to stay on track in your absence, a 1 cr term plan is a must-have.

Marriage
 

As per the WedMeGood annual wedding industry report 2024-25, year on year weddings got 7% more expensive in 2024 with the average budget for wedding being Rs.36.5 lakh in India. Your child’s marriage is an important milestone that should be duly and wholly celebrated. With a 1 crore term insurance plan, you can ensure that your family doesn’t have to compromise on your child’s marriage in your absence. 
 

• Tax benefits

Premium paid
 

Premiums paid for term insurance are eligible for tax deductions under section 80C of the Income Tax Act, 1961¹ upto a limit of Rs. 1.5 lakh.

Death benefit
 

The sum assured that your family will receive in case of your demise will also be tax-free under section 10(10D) of the Income Tax Act, 1961¹. 

Premiums paid for health related riders
 

The premiums that you pay for any health related riders such as the critical illness rider or the wellness rider are also eligible for tax deductions under section 80D of the Income Tax Act, 1961¹.

• Affordability and high coverage

Since term insurance plans provide pure risk coverage, they are affordable in comparison to other types of life insurance and provide high life coverage.  For example, a 25-year-old healthy male would have to pay approximate premium of Rs. 922 per month over 30 years for 1 crore term insurance³.

• Customisation available with riders

In order to further enhance your life coverage, you can opt for add-on riders with your 1 cr term plan. 

Critical illness rider
 

If you opt for a critical illness rider, then you will receive an upfront payout on detection of a critical illness.

Accidental death benefit rider
 

If offers additional payout in case of death due to accident.

Waiver of premium rider
 

Future premiums are waived of if you become critically ill or disabled. 

What are the features and benefits of buying the best term Insurance plan for 1 crore?

Here are some of the top features and its benefits of purchasing the best term insurance plan for ₹1crore:

• Pure risk coverage of 1 crore
   

    High life coverage :
   

  A high sum assured of Rs. 1 crore provides a substantial financial safety net for your family in case of your death. 

   Affordable premiums :
   

  Since term plans are the purest form of life insurance they come as very affordable premiums. For example, a 25-year-old healthy male would have to pay approx Rs. 31 per day over 30 years for 1 crore term insurance3.

   Fixed premium :
   

  Once you buy a term insurance of 1 crore your premiums remain the same for the entire premium paying term making it easy to financially plan for the same.
   

• Assured death benefit
   

   Income replacement :
   

  In case of your demise, the 1 crore sum assured acts as a replacement for your income. This ensures that your family can maintain their lifestyle, meet their regular expenses (food and electricity) and pay ongoing costs (child’s school fees) with any financial distress in your absence.  

   Meet future financial goals :
   

  The lump sum amount of 1 crore ensures that your loved ones don’t have to compromise on their future goals in your absence like – 

  • Child’s education

  • Buying a house

  • Child’s marriage

  • Retirement planning for spouse

   Repayment of debts :
   

  The payout of 1 crore will help your family pay all outstanding debts such as home loan, car loan, education loan etc. ensuring that you leave a debt-free legacy behind. 

   Peace of mind :
   

  Knowing that your family will have an financial safety net in case of your death allows you to live life with less worry.

  • Tax savings as per the Income Tax Act
     

    Under section 80C :

    Premiums paid for the 1 crore term insurance are eligible for tax deductions under the Income Tax Act, 1961¹. 

    Under section 10(10D) :

    Sum assured payout is completely tax-free under the Income Tax Act, 1961¹.

    Under section 80D :

    Premiums paid for health related rider are also eligible for tax deductions under the Income Tax Act, 1961¹.

  • Flexibility
     

      Policy term :

    You can choose the desired policy tenure as per your need to cover your dependents. You have the option to choose a tenure starting from 5 years to 99 years (in case of a whole life insurance).

      Pay out option :

    Term plans offer the flexibility as to how you want your nominee to receive the sum assured of 1 crore – as a lump sum, as regular income or a combination of both. This will allow your family to get the payout as per their financial needs. 

      Premium payment options :

    With a 1 crore term insurance plan you have the flexibility to choose your premium payment frequency – monthly, quarterly, half yearly, annually, limited pay and one-time payment.

  • Rider as add-ons
     

    Critical illness rider :
     

    With an additional critical illness rider along with your base term plan of 1 cr you get upfront payout on detection of a critical illness. This can help you to cover your medical expenses for the treatment of the critical illness. 

    Accidental death benefit rider :
     

    In case of your death due to accident your nominee will receive additional payout along with the 1 crore sum assured.

    Waiver of premium rider :
     

    In case you are disabled then all your future premiums are waived off by the insurer.

    Wellness rider :
     

    Get comprehensive protection against death, terminal illness and disability. 

    Term return of premium (TROP) rider :
     

    If want to get all your premiums back on surviving the policy term then you should opt for the term insurance with return of premium option along with your 1 crore term insurance.   

What are the factors to be considered before buying the best term insurance plan for 1 crore?

Choosing the best term insurance policy for 1 crore requires careful assessment of your financial needs as well as the offerings of the insurers. Here are some factors to consider before making a decision. 

• How much coverage?
   

  Human Life Value :

  Your Human Life Value (HLV) is an estimate of your future income. You can use the HLV calculator to calculate the same. This will help you determine the ideal sum assured. As a thumb rule you can opt for a coverage that is 10-15 times of your annual income.     

  Outstanding loans :

  Taking into account of all loans (home loan, car loan credit card debt etc.) that your family will have to pay in case of your absence. The coverage amount should be able to cover for all the outstanding loans. 

  Current and future expenses :

  Considering current daily expenses such as food, electricity, clothes, transport etc. are essential to determine the sum assured. You should also consider major future expenses such as healthcare for your spouse or parents. 

  Future goals :

  Significant future goals (children education & marriage, retirement for your spouse etc.) that will require substantial money need to be accounted for sum assured calculation. The best term insurance plan for 1 crore ensures that important future goals for your family are taken care of in case of your untimely death. 
   

• How long should be the coverage?
   

  Your dependent’s age :

  If you have financial dependents then your policy term should cover them till the time they become financially independent (till your child gets a job). 

  Your retirement age :

  Another way to determine your policy term is to set it to your retirement age as that’s the time when your financial responsibilities reduce significantly. 

  Long-term liabilities :

  It is recommended that the policy term of your one crore term insurance should cover the tenure of long-term loans such as home loan. 

• How to buy and pay premium?
   

  Premiums should be affordable :

  Term insurance premium for 1 crore is affordable when bought early on in life. Make sure the premium fits your budget so that you are able to pay without any default.

  Premium paying term :

  You can choose a suitable premium paying term from available options – regular, limited and lump sum. You can also choose the frequency at which you want to pay your premium – monthly, quarterly, half-yearly and yearly.

  Buy online or offline? :

  Buying term insurance for 1 crore online has its benefits such as convenience, special online discounts, secured payments etc. But in case you aren’t comfortable buying term insurance online then you can consult an insurance advisor.    
  
  

• How to choose the insurer?
   

  Claim settlement ratio :

  This indicates the percentage of claims an insurer settles in a financial year. You should also check the claim settlement ratio of the insurer in past 5 years to understand if the insurer has been consistent it term of settling claims. For example, claim settlement ratio for HDFC Life was 99.50% in FY24 and has been more than 98% for the past 5 years. 

  Solvency ratio :

  It is a financial metric that indicates the insurer’s capability to meet its obligation of settling claims. For example, the solvency ratio of HDFC Life was 194% in FY25 which is higher than the mandate of at least 150% by IRDAI.    

  Reputation :

  The reputation of the brand plays an important role in deciding the insurer. Make sure the insurer has been established for a considerable time and has a large existing customer base. For example, HDFC Life has been into existing for 25 years and has insured over 66 million lives^@. 

  Customer service :

  Quality of customer service is an essential factor while selecting an insurer as it will determine whether you/your nominee will have a hassle free experience or not. 

• Which features do you need?
   

  Riders :

  You can customise your 1 cr term insurance with add-on riders to enhance the coverage. Select riders depending on the life stage and risk profile. For instance, for a term plan with critical illness rider, if the insured is diagnosed with a critical illness, during the policy term, he receives an upfront payout. 

  Payout options :

  Choose the payout option for the death benefit that meets the financial need of your family. Insurers offer payout options such as regular income, lump sum payment or a combination of both. 

  Flexibility to sum assured :

  Term insurance come with the flexibility to either reduce or increase the sum assured during the policy tenure. For instance, in case of a decreasing sum assured term life insurance you can decide to reduce the sum assured once your child’s education & marriage are completed. 

  Medical examinations :

  Mostly you would need to undergo medical tests in order to buy a 1 cr term insurance.   

  Tax benefits :

  1 cr term insurance premium is eligible for tax deductions under section 80C1 and the sum assured received is also tax-free under section 10(10 D)1. In case if you have opted for a heath related rider (critical illness rider) then the premium for the same is also eligible for tax deductions under section 80D1.  

  Policy exclusions :

  Before buying a term insurance for 1 crore it is important to read policy term & conditions in the policy document very carefully. This will help you get an understanding of the exclusions.

ARN - DM/06/25/24761