Term insurance for Individuals Within the Income Range of 10-15 Lakhs INR

To determine the ideal sum assured for your term insurance, you can follow the general rule of thumb of multiplying your annual income by 10 or 12. However, there is more to it, as your family's unique requirements and financial condition should greatly shape the actual sum assured.

To determine the ideal sum assured for your term insurance, you can follow the general rule of thumb of multiplying your annual income by 10 or 12. However, there is more to it, as your family's...

To determine the ideal sum assured for your term insurance, you can follow...

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Why Term Insurance is a Smart Choice for Those Earning ₹10–15 Lakh Annually

If you earn between 10 and 15 lakh INR, you're at a crucial turning point in your life. You may have a growing family, a mortgage, or children's schooling costs at this stage. Several benefits provided by term insurance address these particular requirements. They are as follows:

Reasonably Priced Premiums

Term life insurance policies are far less expensive than whole life insurance policies. With an annual income of ₹10–15 lakh, paying premiums without breaking the bank is made simpler.

High Coverage

Given your income bracket, you can easily choose a high sum assured, such as one crore. This ensures your family’s financial needs are met even in your absence.

Debt Protection

Term insurance allows big loans and mortgages to be cleared in case of your sudden demise, saving your family from settling these debts. This may be applied to both business loans and personal loans.

Financial Planning

Given your income bracket, term insurance can be an integral part of your total financial planning. It works in tandem with other investments and savings, forming a strong base for financial security and planning for the future.

Riders

Most term insurance plans allow riders to be added, such as critical illness coverage and accidental death benefits. These riders enhance the policy's coverage and provide additional protection at minimal extra costs.

Tax Benefits

Premiums paid towards term insurance are eligible for tax deductions under Section 80C of the Income Tax Act. This can provide you with a valuable tax benefit.

Peace of Mind

You might feel more at ease knowing your loved ones are financially covered. You can concentrate on achieving your life and work objectives without worrying about anything.

What are the Methods to Calculate How Much Term Insurance You Need?

Individuals with a salary of 10 to 15 lakhs per year can use any of the following methods to figure out what their term coverage amount should look like:

The Basic Method

This is the simplest method in this list and one of the most commonly used. Under this method, you multiply your annual income, which is between 10 and 15 lakhs, with any number from 10 to 12. The amount of money you get is what your sum assured should be.

Underwriter’s Thumb Rule

The underwriter’s thumb rule gives more accurate results with its variations. It considers your age and lowers the number as your age increases. Let’s take a look at the numbers assigned to the age brackets:

20 to 30 years old - 15
31 to 40 years old - 14
41 to 45 years old - 12
46 to 50 years old - 10
51 to 55 years old - 8
56 years and above - 6

You can select an age range and multiply the number assigned to it by your annual income.

Human Life Value (HLV)

Using Human Life Value (HLV) is another effective and fairly common method of calculating the sum assured your family needs in your absence. In this method, human life value is estimated by the individual’s income generation.

Factors to Consider When Choosing a Term Insurance Plan

With so many term insurance plans for 10-15 lakh income ranges available, choosing the best one is crucial. Here are some essential things to consider:

Sum Assured

Determine the suitable sum assured by using internet calculators or by speaking with a financial advisor. Consider your future financial objectives, your dependents' demands, and your current debts.

Policy Term

Select a term for your policy that corresponds with your financial commitments and duties. The duration should ideally include your earning years and continue until your dependents have achieved financial independence.

Claim Settlement Ratio (CSR)

This ratio shows the proportion of claims the insurance provider resolves. Choose businesses with a strong CSR (over 90%) to guarantee your recipients are paid on time.

Policy Riders

Policy riders are extra advantages that you can choose to add to your standard coverage. Popular riders include waiver of premium rider, critical illness insurance, and accidental death benefit. Select the best riders to meet your demands, but remember that they could raise the charge.

Additional Tips to Get Term Insurance for 10-15 Lakh INR Earners

Here are some extra tips you can follow while buying a term insurance plan for a 10-15 lakh INR income range:

Compare internet Insurance Quotes

Use internet comparison tools to evaluate policies offered by various providers and choose the most cost-effective choice with the finest coverage. You may enter your information on these sites and get quotations from different insurance companies. This allows you to evaluate features, alternatives for coverage, and—most importantly—the price of premiums.

Maintain a Healthy Lifestyle

Eating a balanced diet and exercising regularly can help you live a healthier lifestyle, which may also reduce your term insurance costs. Healthy people can receive savings from several insurers.

Consult a Professional

Seeking advice from a certified financial advisor may be quite beneficial. They can evaluate your financial objectives, risk tolerance, and specific demands. They can advise you on the best term plan and help you with the application procedure based on this research.

Sincere Disclosure

Provide accurate information about all medical conditions when applying for a term plan. If you don't, your claim can be rejected later.

Review and Update Often

Your insurance needs may vary when circumstances change, such as after marriage, having a kid, or moving up in your work. Review your term plan every three to five years and adjust the coverage based on your evolving needs.

Claim Intimation Process

Become acquainted with your selected insurer's claim intimation procedure. If a claim arises, ensure you have all the paperwork for a seamless claim settlement.

Frequently Asked Questions

Here are some of the questions and answers people ask about 10-15 lakh term insurance plans frequently:

How do you choose the right term insurance plan?

To choose the right term insurance plan, compare plans and insurers, check the insurance company's claim settlement ratio and financial health, get the appropriate coverage, determine the policy tenure, and consider add-on riders.

What types of term insurance are there?

Different types of term plans cater to different needs. Here are the four types of term insurance India has: Level Term Plans, Increasing Term Insurance, Decreasing Term Insurance, Return of Premium Term Insurance, and Convertible Term Plans.

Which is better, term insurance or whole life insurance?

If you need life insurance for a limited period, choosing term insurance is better as it also comes with more affordable premiums. However, if you want coverage to last your whole life, you can select a whole life insurance plan.

At what age should you opt for term insurance?

The younger you are, the less premiums you have to pay. That being said, the minimum age for opting for a term plan is 18, and the maximum is 65.

Can I take two term insurance?

Yes, you can have multiple term insurance based on your needs.