Term insurance is a crucial component of sound financial planning. It is a type of life insurance that provides life coverage for a specific term, usually between 10 and 30 years. With term insurance, if the insured passes away during this term, the death benefit is paid to the beneficiaries or nominees. Read on to delve deeply into the specifics of the ₹12 crore term insurance to make better decisions.
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₹12 crore term insurance is a pure protection life insurance plan that pays out ₹12 crore to the beneficiaries if the insured passes away during the policy term. This kind of plan creates financial security for the insured's family, ultimately protecting them from financial burdens at times of crisis. It offers a high sum assured at relatively low premiums.
Many ₹12 crore term insurance plans from different insurers offer additional riders for extra coverage, such as critical illness or accidental death benefits. In addition, premiums paid are eligible for tax deductions under Section 80C of the Income Tax Act.
A term plan for such a high sum is not a small investment. Let’s look at who is eligible and who should consider this level of coverage.
People with high net worth or incomes may need such insurance to ensure their family's financial future and help save the wealth achieved through tireless hard work.
Working people who are the primary breadwinners must take a larger sum assured to cover the living expenses, debts, and other future liabilities in case of an untimely demise.
If you have borrowed substantial loans or mortgages, you will need a higher sum assured to help settle the debt so your loved ones will not have to carry the burdens.
People planning to pay for higher education, weddings, and other big future expenses for their children need a higher sum assured to meet their financial goals.
Entrepreneurs with business duties or debt liabilities may need higher coverage to protect and sustain their companies.
More coverage will give you greater peace of mind, especially if you have dependents like children, ageing parents, or a spouse financially dependent on you.
Most insurers target people between 25 to 55 years for high-sum assured policies. Of course, the reasons include:
Buying a ₹12 crore term insurance plan is a big financial decision and is often influenced by various factors. Some of the key factors for determining the right time to buy such a policy include the following:
If you are between your 30s or 40s with dependents like kids or ageing parents, this is the right time to buy a term plan with a large sum assured.
If your career promotion has resulted in a higher annual income, you may want to reevaluate your insurance needs and opt for more coverage.
If you know your future costs, such as when your children get married or go to college, you can purchase insurance now and lock in lower premiums.
Make sure a ₹12 crore term plan premium fits within your budget without compromising other financial goals.
If you're in good health, it's often advisable to secure a term plan sooner rather than later, as premiums can increase with age or due to health issues.
Observe the directions of the insurance market regarding policy features, premium rates, or additional benefits which could alter your decision.
If you are considering purchasing a ₹12 Crore term plan, these are key factors you should consider to make informed decisions.
Would ₹12 crore sum assured help care for your family's future financial needs in your death? Remember outstanding loans, education, personal expenses, and all other financial liabilities you want to fulfil.
Can you comfortably pay ₹12 Crore Term Insurance premiums over the policy term? Ensure the premiums are within your budget.
Identify any other benefit you may need, such as critical illness coverage, accidental death benefits, or waiver of premium.
Choose a suitable policy term based on your needs. If you have children, you may require a longer policy term.
Understand the claims settlement ratio, customer feedback regarding service, and financial stability.
The premiums paid for term insurance are covered by Section 80C of the Income Tax Act, meaning they can be deducted. In addition, a death benefit given to any beneficiary is tax-free under Section 10(10D).
Check whether the policy is renewable and allows for portability so that you can switch to another insurer without losing any benefits.
Exclusions are a very important area. The policy document specifically mentions which risks are excluded from the policy and sometimes even includes suicide clauses.
Sometimes, before making a final decision it's always wise to seek the advice of a financial planner or insurance professional.
Explore ACKO Life Flexi Term Plan, a modern, highly flexible, and customer-centric solution for long-term financial protection. This unique term plan option from ACKO provides an exceptional level of flexibility. With this plan, policyholders can easily make any policy adjustments, such as:
Calculating the right coverage requires a thorough review of your financial obligations:
Note: You can also use a term plan calculator to estimate your premiums. A term insurance calculator is an online tool designed to help you determine the right coverage amount you need and the associated premium costs.
₹12 crore term insurance is popular, particularly among high-net-worth individuals and primary breadwinners, as it provides substantial coverage. If you are considering purchasing ₹12 crore term insurance, consider the premium affordability and the insurer's reputation. A financial advisor can also assist you in deciding if you get confused with the procedure.
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet, and is subject to changes.
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Reviewed by Vaibhav Kumar Kaushik 
Acko Technology & Services Private Limited
#36/5, Hustlehub One East, Somasandrapalya, 27th Main Rd, Sector 2, HSR Layout, Bengaluru, Karnataka 560102
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