5 Crore Term Insurance

Table of Content

1. What is a 5 Crore Term Insurance Plan?

2. Why Buy a 5 Crore Term Insurance Plan?

3. Why Sum Assured is an Important Factor When it Comes to Term Insurance?

4. How Does a 5 Crore Term Insurance Work?

5. What are the Benefits of a ₹5 Crore Term Insurance Plan?

6. Key Features of 5 Crore Term Insurance Plan

7. How to Determine the Right Coverage Amount for the Best Term Insurance Plan for 5 Crore?

8. Is ₹5 Crore Term Insurance the Right Choice for You?

9. Who Should Buy a 5 Crore Term Insurance Plan?

10. Factors to be Considered Before Buying the Best Term Insurance Plan for 5 Crore

11. How to Choose the Best Term Insurance Plan for 5 crore?

12. How to Buy 5 Crore Term Insurance Online?

13. Things That Impact the Cost of 5 Crore Term Life Insurance

14. How to Figure Out the Right Coverage Amount?

15. Summary

16. FAQs on 5 Crore Term Insurance

What is a 5 Crore Term Insurance Plan?

A ₹5 crore term insurance policy is a pure protection life insurance policy. It promises to pay a sum assured of ₹5 crore to the nominee in case the policyholder passes away during the policy term. Importantly, this plan does not offer any survival or maturity benefits if the policyholder outlives the term; it is strictly meant for financial protection.

But how does the plan work?

This term insurance plan functions on a straightforward yet powerful principle:

• The policyholder selects:

The coverage amount (₹5 crore)

The policy term (e.g., 30 years)

The premium payment frequency (monthly, quarterly, or yearly)

• The policyholder then pays fixed premiums as chosen.

• In case of an untimely demise during the policy period:

The insurer disburses the entire ₹5 crore sum assured to the nominee.

This ensures that the family remains financially protected and can continue their lifestyle while managing liabilities like EMIs, education, or household expenses.

Let us look at an example related to premium estimates. To illustrate the affordability of such a policy:

A healthy 30-year-old non-smoking male can expect to pay approximately:

• ₹4,230 per month²⁰

• For a ₹5 crore term plan with a 30-year tenure

Note: These are indicative figures, and actual premiums may vary depending on factors such as age, health condition, lifestyle habits, and underwriting rules of the insurer.

Now comes the question: who should consider a ₹5 crore term plan?

This plan is ideal for individuals who have major financial responsibilities or long-term life goals. It provides peace of mind that your family’s needs will be met even in your absence.

You should consider this plan if you have:

• Financial dependents (spouse, children, ageing parents)

• Large home or personal loans

• Business or commercial liabilities

• Long-term goals such as:

Children’s higher education abroad

Retirement corpus for spouse/family

Family’s regular lifestyle expenses

A ₹5 crore life insurance policy plan gives your family the financial security to cope with future expenses, even without your income.

Why Buy a 5 Crore Term Insurance Plan?

In the fast-paced urban life of today, when costs are increasing and future obligations are increasing, a ₹5 crore term plan is no longer a luxury item. It is a requirement. For most working professionals and entrepreneurs, it is a reasonable benchmark to safeguard their family from financial uncertainties while saving for major goals such as housing, education, and retirement.

With inflation increasing every day, a higher cover of ₹5 crore guarantees that your family's future remains secure and respected.

Budget-friendly Premiums

One of the greatest benefits of term insurance is the large sum assured at low premiums. A healthy non-smoker male between the ages of 40 years can even purchase a ₹5 crore term plan for as little as Rs. 8,961 per month²¹  keeping the premium payment term as 30 years, making it very economical to safeguard your family's future. Therefore, the sooner you purchase, the less you will pay as a premium amount.

Works as a Financial Safety Net

In the event of a tragic occurrence, a ₹5 crore payment ensures your family does not need to sacrifice their lifestyle or aspirations. It may offset lost salaries, pay for daily living expenses, and secure your children's future. Substantial home loans, auto EMIs, or personal loans can be settled without trouble using the sum assured.

Extensive Coverage

From financing an education abroad for a child to supporting ageing parents or lifestyle costs, ₹5 crore protects long-term expenditures. Although low cover is sufficient today,  it can prove inadequate over 40 years with inflation and changing financial requirements. A ₹5 crore life insurance cover keeps you ahead.

Boosts Savings and Investments

As the ₹5 crore term plan does not require paying a heavy premium, you have more money to invest in mutual funds, properties, or retirement schemes. Without you, the life cover allows your family to keep those investments on the same trajectory without any interruption.

How Does a 5 Crore Term Insurance Work?

To learn how a term plan for 5 crore works, let us consider the following example:

For example, Rohan, a non-smoking, 42-year-old working professional in Mumbai. He has a working partner, two young kids, dependent parents, and a home loan of ₹80 lakh. Rohan chooses a ₹5 crore term insurance policy for a policy tenure of 30 years. He pays around ₹10546 every month²² to secure your family’s future.

If Rohan dies during the policy tenure, his nominee would get ₹5 crore as the death benefit. It is a financial protection that takes care of everything from important expenses to long-term objectives.

The table below shows how the ₹5 crore term insurance plan could help his family:

Pro Tip: Your ideal cover should be 10 to 15 times your annual income, factoring in debts, lifestyle needs, and future goals.

NOTE: The above table is for illustrative purpose. Actual figure can vary.  

What are the Benefits of a ₹5 Crore Term Insurance Plan?

Selecting a ₹5 crore life insurance policy provides your family with financial security while assisting you to maximise tax savings. It is an extraordinary combination of high coverage and long-term protection.

Helps You Maintain Your Lifestyle and Fulfil Long-Term Goals

A ₹5 crore term insurance plan provides a strong financial cushion that ensures your family never has to compromise on their lifestyle or aspirations. Whether it is funding your child’s higher education abroad, planning their dream wedding, or continuing everyday expenses with dignity, the payout helps bridge the income gap in your absence.

When 35-year-old IT professional Rajeev dies suddenly, the ₹5 crore benefit from his term plan allows his wife to continue paying EMIs, fund their daughter's foreign education, and maintain their lifestyle, without relying on family members or selling investments.

Tax Advantages Under the Income Tax Act

A ₹5 crore term plan does more than give life coverage - it also provides beneficial tax benefits. Under Section 80C¹, the premiums paid (up to ₹1.5 lakh annually) qualify for deduction from taxable income. Under Section 10(10D) ¹, the entire payout to the nominee is tax-exempt, following current tax laws and policy terms. This renders your term insurance of 5 crore a tax-effective financial planning.

Financial Stability for Your Relatives

An extensive coverage assures your dear ones are never left financially vulnerable. For entrepreneur Sneha, the ₹5 crore term life insurance cover means her parents are financially protected, her business loans will not be a burden on her family, and her child can continue their education, even in her absence.

Key Features of 5 Crore Term Insurance Plan

A ₹5 crore term insurance policy does more than simply offer financial security. It provides sensible and flexible benefits that can be customised to meet various requirements. Take a look at the salient product-specific benefits that make it a wise long-term option:

High Coverage at Affordable Premiums

Term insurance is popular for providing high coverage at affordable premium amounts compared to other policies. For example, a 50-year-old non-smoker can get a ₹5 crore term plan for ₹ 21,649 per month²³ considering the policy term as 30 years. This helps ensure that even those with moderate incomes can get high protection without hampering their budgets.

Premium Payment Flexibility

Decide in what way you would like to pay your premiums, monthly, quarterly, annually, or even as a limited-pay facility. Some insurers also have single premium offerings or let you pay for 10 or 15 years while maintaining the cover for the entire policy duration.

Customisation with Riders

Increase your core plan with optional add-ons like critical illness coverage, accidental death benefit, or waiver of premium due to disability. These add-ons provide comprehensive financial security for a range of life risks under a single coverage plan.

Claim Payout Flexibility

You get to decide how your loved ones receive the ₹5 crore settlement, in a lump sum, monthly recurring income, or a mix of both. This gives assurance that the money is spent judiciously, meeting both short-term and long-term requirements.

HDFC Life is one among many insurers that have a claim settlement ratio of 99.68%^##, providing an additional sense of reassurance that your family will receive timely and trustworthy assistance when they need it most.

How to Determine the Right Coverage Amount for the Best Term Insurance Plan for 5 Crore?

Selecting the appropriate term cover is all about knowing your future and current financial requirements. Here is how to assess whether a ₹5 crore term insurance policy would be suitable for you:

Assess Financial Dependents' Needs

Begin by adding up the number of individuals dependent on your earnings, like spouse, children, and parents. Consider their recurring lifestyle costs and how long they will be in need. A greater cover of ₹5 crore provides them with total financial security even without you.

Your Age

Your age determines both your need for coverage and the premium amount. Covering yourself at an early age results in low premiums and good value. Younger individuals with future responsibilities are likely to derive more benefits from a ₹5 crore cover.

Annual Income

A thumb rule is to select a cover of 10–15 times your yearly income. You can get a ₹5 crore term plan if you have a ₹30 to ₹50 lakh annual income or outstanding career growth. This policy will adequately support your family's future financial requirements.

Adjust for Inflation

₹1 crore today may not have the same value 20 years later. A ₹5 crore term insurance plan offers a wider safety margin, helping your family maintain their quality of life in the face of rising prices over time.

Factor in Future Responsibilities

Supporting your child's further studies overseas, supporting ageing parents, or arranging for your spouse's retirement can be a financial burden. A ₹5 crore life cover ensures that protection is adequate with your family's lifetime objectives, providing comfort and continuity.

Include a Buffer For Emergencies

Medical emergencies, legal issues, or unexpected financial shocks can deplete savings. Adding an emergency cushion to your term cover amount guarantees that your family never has to tap other investments or assets in times of crisis.

Consider Existing Investments and Assets

If you already have significant assets, you can deduct their value from your insurance needs. However, term cover should still fill any residual financial voids with confidence.

Ensure Premium Affordability

A ₹5 crore term insurance provides high coverage, and it is essential to make the premium affordable for both your present and future budget. Utilise online calculators to weigh coverage and affordability without putting a burden on your finances. 

Is ₹5 Crore Term Insurance the Right Choice for You?

With increased living expenses, greater ambitions, and long-term commitments, selecting the optimal sum assured is critical. Let us see how a ₹5 crore term insurance policy is suitable for your financial objectives and provides peace of mind.

Coverage That Matches Your Needs

A ₹5 crore term insurance policy might seem expensive at first glance, but it is usually the most sensible option for someone with large financial obligations. For example, if you are a young mother or father, an urban working professional, or a person with long-term loans such as a huge home loan, this amount of coverage will keep your family financially independent in your absence.

It is designed to cover everything from monthly living costs, EMIs, children’s higher education, to retirement funds for your spouse. In today’s economy, where inflation impacts even basic expenses, ₹5 crore is no longer excessive but realistic. Furthermore, it provides security and confidence that your family’s future will not be compromised in your absence.

Add-on Riders to Strengthen Your Protection

With a premium plan of ₹5 crore, it is sensible to upgrade your policy with riders that provide additional protection against life’s uncertainties. The optional add-ons are reasonably priced and increase the strength of your cover:

• Critical Illness Rider: Pays a lump sum on diagnosis of critical illnesses such as cancer or heart disease.

• Accidental Death Benefit: Gives an additional amount if death results from an accident.

• Waiver of Premium: future premiums if the policyholder becomes permanently disabled or critically ill.

These riders enable you to go beyond protection at death, ensuring financial assistance is there if health problems or disability occur.

Fixed Premiums for the Entire Policy Duration

One of the main benefits of a high cover term plan is locked-in premiums. After you buy the policy, the premium is fixed during the term, irrespective of age or health change. For instance, if you buy at age 30, you will pay the same premium even at 50, providing financial certainty and assurance. 

Who Should Buy a 5 Crore Term Insurance Plan?

A ₹5 crore term insurance plan offers a balanced mix of affordability and meaningful financial protection. Whether you are just starting your career or managing a household, this coverage can meet a wide range of responsibilities with ease.

Here is who should consider it and how it benefits them:

Factors to be Considered Before Buying the Best Term Insurance Plan for 5 Crore

A ₹5 crore term insurance plan provides robust coverage, but ensure that it matches your financial profile and long-term requirements. Here is a practical checklist to assist you in evaluating the key factors before making a decision:

Check Coverage Amount

Calculate your present earnings, expenses, dependents, and long-term aspirations before deciding on ₹5 crore. For instance, take the rule of thumb, 10 to 15 times your earnings for a year. Add large expenses in life, such as education, borrowings, and retirement, to see if ₹5 crore is appropriate for your profile.

Policy Tenure

Select a term policy that insures you until at least 60 to 65 years, or until your utmost responsibilities are completed. The longer your tenure, the better your family will be covered during your working age and after, without additional policies.

Premium Affordability

While ₹5 crore is a significant amount assured, premiums can be surprisingly low, provided one buys them early. Compare rates and use online calculators to ensure the premium is not a burden to your monthly budget.

Claim Settlement Ratio (CSR)

Opt for insurers with a CSR above 95%, such as HDFC Life, which has a claim settlement ratio  of 99.68%^## as in FY24-25. This indicates reliability in settling claims and provides peace of mind that your family will not face difficulties during a sensitive time.

Riders

Enhance your base plan with useful riders like critical illness, accidental death, and waiver of premium. These add-on benefits offer protection against non-death risks, making your policy more effective.

Purchase Requirements

Keep track of the documents needed, such as income evidence, medical histories, and identification documents. A large amount assured, like ₹5 crore, may also require a medical test and thorough financial underwriting before sanction.

Policy Exclusions

Carefully read the policy brochures and documents. Suicides (in the first year), self-harm, or undiagnosed medical issues are typical exclusions. Knowing the exclusions prevents claims rejection later.

Claims Process

Select an insurer that offers a hassle-free and clear claims procedure. Familiarise your nominee with initiating a claim, filing necessary documents, and monitoring the settlement. An easy procedure helps in getting financial assistance quickly.

Flexibility for Upgrading or Modifying the Plan

Verify if your plan includes increasing coverage, changing to whole life, or changing payout modes. Flexibility ensures that the policy is flexible as your life changes. For instance, you can increase coverage during major life changes such as marriage, having children, or income increases, without requiring a new plan.

Confirm Tax Benefits

Make sure the policy is tax-deductible under Section 80C¹ (on premiums) and Section 10(10D¹) (on death benefit received). These tax benefits make your term plan tax-effective, cutting your overall tax expenses while offering financial protection.

How to Choose the Best Term Insurance Plan for 5 crore?

Selecting the best ₹5 crore term insurance plan involves more than simply selecting the highest cover. You must find a plan that suits your financial objectives, obligations, and long-term security for your family. Here are the ways to select the best term insurance plan for 5 crore:

Premiums

Compare the premium charges of different insurers to identify the most affordable one without compromising the features. Opt for fixed premiums that stay constant throughout the term, and ensure that they suit your income and lifestyle to avoid affordability concerns in the future.

Claim Settlement Ratio (CSR)

Always verify the insurer's CSR. It expresses the company's credibility in settling claims. The possibility of claim approval increases the closer a company’s claim settlement ratio  is to 100. For example, a CSR of 95% and above means a reliable insurer, which matters particularly when the sum assured is so high as ₹5 crore.

Riders

Riders complement your basic policy with extra coverage. Therefore, select policies with applicable riders such as critical illness, accidental death benefit, waiver of premium, or income payout features. These features offer a more comprehensive insurance suitable for your requirements.

Age

Your entry age influences premium costs directly and policy tenure choices. Early purchase not only secures low premiums but also guarantees longer coverage, especially useful while planning for a substantial sum assured like ₹5 crore.

Financial Dependent

Consider the number of your dependents and their future aspirations, like education, loans, or daily living expenses. A ₹5 crore policy is ideal for those who have long-term, high-value liabilities. The following table shows what are the stages and situations of life when it is a smart move to buy a term insurance plan:

How to Buy 5 Crore Term Insurance Online?

Purchasing a ₹5 crore term insurance policy online is now easier, quicker, and more convenient than ever. Whether you are planning for your family's financial security or planning to increase long-term obligations, follow these simple steps below to purchase a ₹5 crore term insurance policy online:  

•  Step 1:

Visit our official website and go through term insurance plans available

• Step 2:

Choose the term plan you wish to buy as per your requirements

• Step 3:

Fill all required details such as age, name, and gender of the application form

• Step 4:

Gather all documents required such as- proof of your age, address and identity. Once done click on 'Submit'. The address proofs usually includes Aadhaar card, and a passport. PAN card is the Mandatory document

• Step 5:

You can also select the features, such as the payment method of premiums, riders, policy term, etc

•  Step 6:

Make the premium payment through UPI, debit or credit card, net banking, and others

• Step 7:

Once your application is submitted, we will further review your form and documents

• Step 8:

A copy of your chosen policy will be further sent to your email address, and the your insurance policy will be active 

Disclaimer: Always read the policy brochure and terms carefully before proceeding, so you are fully aware of the coverage, riders, and exclusions.

Things That Impact the Cost of 5 Crore Term Life Insurance

The term insurance plan you buy should be adequate to cover your family’s requirements in your absence and must be easy on your pocket as well. Understand the factors that impact term insurance premiums before you purchase a policy. Conducting a term insurance comparison can give you better insights into which plans offer the right balance of cost and coverage. Consider the following factors before investing in the 5 Cr term plan:

• Tenure

Investing in the 5 crore term plan when you are younger gives you the benefit of longer tenure. The premiums are lower for longer tenure and higher for shorter tenure. So, you can get higher coverage for an affordable premium.

• Premium Payment Term

The premium payment term defines the outflow of the total premium. The shorter the premium payment term, the higher the premium outflow, unlike the regular premium payment option where the premium payment term is equal to the policy term.

• Existing Health Condition

Your existing health conditions determine the risk factor for the insurance company. If you have existing health issues, the risk is higher, and the premium will be proportionately higher. If you have robust health when you apply for the term plan, the premium will be considerably lower.

• Lifestyle

Smoking and alcohol consumption are considered hazards that give rise to several health issues. If you have such lifestyle habits, the premium for the term insurance will be higher as the risk involved is higher.

• Age

The age of the policyholder has a significant impact on the cost of a 5 crore term insurance policy. If you invest in a policy when you are younger, you can opt for a longer term and get the benefit of higher coverage at a lower premium.

How to Figure Out the Right Coverage Amount?

To determine the right coverage for your family’s financial security, consider the following factors:

• Your Yearly Earnings

The golden rule to ascertain the right coverage amount is that it should be 10 times your annual income. This rule considers the inflation rate and helps beat the future price rise. This will provide adequate coverage for your family to meet their requirements without digging into savings.

• Current Age

Age plays a critical role in determining the right coverage. If you invest at an early age when you are healthier, you can opt for a long-term insurance plan at a lower premium. As you age, your health deteriorates, and the premiums for term plans also are higher. Buying term insurance at a young age provides the benefit of lower premiums with financial security for your family for a longer duration.

• How Many Dependents You Have and What They Need

When you plan for financial security for your family, consider the number of persons financially dependent on you and their requirements. The coverage should be adequate to meet all their requirements like education, marriage, loan repayments, etc.

• Outstanding Loans and Debts

Along with other needs of your family, you should also consider the loans and debts you have incurred to determine the coverage. With a 5 crore term insurance, your family should be able to meet their requirements even after paying off the outstanding debts. A term plan ensures that the burden of repaying debts does not pass on to your family in your absence.

Summary

Life is uncertain, and planning for your family’s financial security should be a priority if you do not want your family to be in financial lurch in your absence.  A 5 crore term insurance plan provides high coverage at lower premiums, ensuring that your family is supported financially in your absence. The term insurance plan can be customised with add-on benefits like critical illness rider, accidental death benefits, premium waivers, etc. Invest in the 5 crore term plan to ensure your family has financial protection and can maintain living standards even in challenging times.

FAQs on 5 Crore Term Insurance.

1. What is the minimum salary for a 5 crore term insurance?

Though insurers do not publicly state a fixed salary requirement. However, individuals having a stable income of ₹30 lakh to ₹50 lakh are typically expected to qualify for a ₹5 crore sum assured, subject to underwriting and financial documents.

2. What are the eligibility criteria to purchase a Rs. 5 crore term plan?

To purchase a ₹5 crore term insurance policy, you typically need to fall in the age bracket of 18 to 65 years, earn a regular income, have citizenship proof, and identity proofs. You also need to undergo a medical test for such a high insurance plan. However, different insurance providers have different eligibility criteria.

3. What is the premium amount for a term plan offering coverage of Rs. 5 crore?

Premiums change according to age, lifestyle, tenure, and medical conditions.  You can use an online premium calculator to know the accurate amount.

4. How can I purchase a Rs. 5 crore term plan?

You can easily buy a 5 crore term plan online through the insurer’s official website. Just enter your details, compare plans, upload documents, schedule any required medical tests, and pay the premium to get your policy issued.

5. How to calculate term insurance premium?

The premium varies with policy tenure (longer terms usually lower year-on-year costs), sum assured, and health habits such as smoking, drinking, and medical history. Compare costs using an online premium calculator and make easy decisions.

6. What happens if I survive the policy tenure?

No maturity benefit is paid if you outlive the tenure in a pure term plan. However, if you go for a Return of Premium (ROP), all premiums paid (excluding taxes) are returned upon survival.

7. Is a 5 crore term insurance worth it?

Yes, it is best if you have outstanding loans, financial dependents, or long-term targets such as children's education. It keeps your family comfortable in your absence and easily fulfils future requirements.

8. What factors impact 5 crore term insurance premiums?

Premiums are affected by age (the younger you are, the lower your premium), medical/family history, and lifestyle activities such as smoking or adventure sports. Riders also increase premiums slightly but improve coverage.

9. Will the payouts for the   term insurance plan for 5 crore be taxed?

No, the death benefit from a term insurance plan is completely exempt from tax under Section 10(10D) of the Income Tax Act, 1961¹, regardless of the premium amount or policy issuance date. Since term insurance is a pure risk-cover policy generally with no maturity or surrender value, the restrictions on exemption based on premium-to-sum-assured ratios or high-premium thresholds (as applicable to ULIPs or other life policies) do not apply. Consequently, the payout is not taxable, ensuring that the nominee receives the entire sum assured without any tax liability. Even if the Return-of-Premium (ROP) option has been availed the same shall not be taxable being a capital receipt.

Related Article

• 1 Crore Term Insurance: Buy Best Term Insurance Plan for 1 Crore at ₹21/day
• 1.5 Crore Term Insurance Plan - Why do I Need 1.5 Crore Term Insurance
• Buy 2 Crore Term Insurance Plan Online in India
• 10 Crore Term Insurance Plan - Why do I Need 10 Crore Term Insurance