Why Do I Need Rs 10 Lakhs Term Insurance?
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When it comes to financial planning, many people avoid purchasing term plans since they do not offer additional maturity benefits. However, term policies provide adequate life coverage at affordable premiums, making them integral to every sound financial plan. While purchasing term policies, individuals should choose enough coverage to ensure their loved ones do not face financial hardships if something happens to them. Let’s better understand how Rs. 10 lakhs term insurance can benefit you and your loved ones.
What Is a Rs. 10 Lakh Term Insurance?
A Rs. 10 lakh term policy offers life coverage of Rs. 10 lakhs for the policy tenure. If anything happens to the policyholder during the term, their beneficiary receives a payout of Rs. 10 lakhs. The money should be adequate to help replace the policyholder’s lost income and repay any outstanding debts.
Why Buy Rs. 10 Lakhs Term Insurance?
Most financial advisors recommend life coverage equal to at least ten times your current annual income. The idea is that the payout should help your loved ones maintain their standard of living in the future. A Rs. 10 lakh term policy is adequate for individuals who earn Rs. 1 lakh per year or a monthly income of Rs. 8,500. Additionally, individuals can opt to purchase a Rs 10 lakh term insurance plan as an additional policy to alleviate the financial burden of debt in the future.
How Does a Rs. 10 Lakh Term Plan Work?
Most people purchase a Rs. 10 lakh term plan to enhance their family’s financial stability after an unfortunate event. The plan only boosts the financial payout provided by another life plan. For example, Amita purchased a term plan offering coverage of Rs. 75 lakhs for 35 years in her late 20s, when she earned Rs. 6 lakhs per year. The amount was adequate to help her family members replace her lost income. However, in her late 30s, Amita had to take a car loan, which increased her financial liabilities. She purchased another term plan worth Rs. 10 lakhs for 15 years to ensure her family would not struggle financially without her. Amita's family will receive a total payout of Rs. 75 lakhs plus an additional payout of Rs. 10 lakhs if anything happens to her over the next 15 years. They can use the first amount to maintain their standard of living and the rest of the money to repay the outstanding loan.
What Are the Benefits of Rs. 10 Lakhs Term Insurance?
When you purchase a term insurance policy worth Rs. 10 lakhs, you benefit from:
- Affordable premiums
- Premium payment flexibility
- Purchase riders to customise the plan to meet your specific requirements.
- Get tax benefits according to Income Tax Act*
- Financial security for your family
How to Choose the Right Rs. 10 Lakhs Term Insurance Plan
You should consider the following crucial points while evaluating your options for a term plan:
Always compare the premiums various term insurance providers offer before selecting a plan.
Claim Settlement Ratio
Check the insurance provider’s website for their claim settlement ratio. It tells you how many claims they settled as a percentage of all requested receives. A high claim ratio is a good sign.
Check the add-ons that various insurance companies offer. You could boost your coverage and safeguard your family’s financial future by selecting the add-ons that suit your needs.
Frequently Asked Questions
Q: What are the eligibility criteria to purchase a Rs. 10 lakh term plan?
A: Any working individual between 18 and 65 can purchase a Rs. 10 lakh term plan.
Q: What is the premium amount for a term plan offering coverage of Rs. 10 lakhs?
A: The premium for the term policy depends on your lifestyle, age, health, income range and more.
Q: What happens if I survive the policy tenure?
A: Term plans do not offer any maturity benefits. However, individuals who selected a Return of Premium policy, will get the premiums back on maturity.
- Can NRIs Buy Term Insurance in India?
- What is a Level Term Life Insurance policy?
- 5 Simple Steps to Follow When Buying Term Insurance
- 4 Simple Methods to Calculate : How Much Term Insurance You Need
ARN - ED/04/23/1621
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##Individual death claim settlement ratio by number of policies as per audited annual statistics for FY 2021-22.
#Provided we have received all the relevant and required documents and no further investigation is required. Claim settlement process would be completed within stipulated timelines once the claim request is approved
^ Available under Life & Life Plus plan options
*As per Income Tax Act, 1961. Tax benefits are subject to changes in tax laws.