Term Insurance for High Net Worth Individuals (HNIs)

HNIs often have significant assets tied up in real estate or businesses, which cannot be liquidated easily. Term Insurance ensures your family gets an immediate payout to maintain their lifestyle and cover any outstanding business or personal loans.

HNIs can secure large life covers in crores at low premiums, especially if done early in life. For instance, at HDFC Life, we offer Rs. 1 crore Term Insurance starting from just Rs. 21/day. This makes it a cost-effective way to safeguard substantial wealth.

Generally, HNIs might have business or home loans. If something happens to you, the insurance payout can help your family settle these debts without dipping into long-term investments or liquidating assets at a loss.

Some Term Insurance plans for HNI offer a “return of premium” feature that refunds all premiums paid if you survive the policy term after deducting applicable charges. Considering this ‘no-loss’ feature can be better than receiving nothing after the policy term ends.

Knowing that your family will receive a guaranteed sum allows you to plan your estate and business succession confidently. This is especially valuable for HNIs, whose wealth is often complex and diversified.

Some insurance companies offer HNIs exclusive benefits such as higher coverage limits, customised plans, dedicated relationship managers, etc. Some plans even provide critical illness or accidental death riders for added protection.

Insurance providers often extend personalised services to high-value clients, including dedicated relationship managers or exclusive HNI desks. This premium support ensures faster claim processing, customised policy recommendations, and seamless assistance tailored to the complex financial needs of HNIs.

Premiums paid qualify for tax deductions under Section 80C, and payouts are tax-free under Section 10(10D). Term insurance tax benefits help you optimise your tax outgo while securing your family’s future.

Real-Life Example:

A business owner with Rs. 6 crore in assets, mostly invested in his company and property, bought a Rs. 2 crore term insurance plan. When he passed away unexpectedly, the insurance payout helped his family to pay off business loans and maintain their lifestyle without selling assets at a loss. This example illustrates the true value of Term Insurance for HNIs.

For HNIs, the coverage amount must be higher to match the family’s lifestyle, outstanding liabilities, and future financial goals. The sum assured should cover your financial responsibilities, such as debt coverage and estate planning needs.

The policy duration should align with your income-earning years and the duration when dependents rely on you. For legacy and estate planning, whole-life or extended-term policies are preferred.

You get options to choose from single, limited, or regular premium payment modes. The selection should be correct and based on your cash flow preferences and overall financial planning.

Riders such as critical illness, accidental death, and waiver of premium are essential add-ons that add a shield to your Term Insurance. They enhance the basic policy by providing targeted financial support during emergencies and ensuring comprehensive protection.

Selecting insurers with a strong claim settlement ratio, good reviews, and premium customer service is crucial. You should prioritise providers such as HDFC Life that offer tailored services and a proven track record in handling large-value claims.

Term Insurance offers significant tax advantages under Sections 80C¹ (premium deduction), 10(10D)¹  (tax-free death benefit), and 80D¹ (health-related riders). Choosing the correct Term Insurance also helps in efficient tax planning.

Starting a policy early secures lower premiums, but tailored plans are available for older HNIs as well. Age directly impacts premium costs and the maximum available policy term.

You should check flexible Term Insurance policies that can be adjusted to meet evolving personal and business financial goals, such as increasing coverage or modifying terms as circumstances change.

Policies that allow increasing coverage or adjusting terms at different life stages offer valuable flexibility to respond to changes in income, asset base, or liabilities.

If you hold international assets or your family stays abroad, therefore, global coverage, overseas claim settlement support, and international portability are essential to ensure uninterrupted protection across borders.