Securing a term plan is a smart decision for individuals whose income range falls between ₹10 to ₹20 lakh. You likely have specific liabilities and financial responsibilities at this income level—like loans, family expenses, etc. A term insurance policy protects your family’s future and offers peace of mind. In the unfortunate event of your untimely passing, your loved ones will receive a large payout.
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For someone in the income bracket of ₹10 to ₹20 lakhs, a suitable term insurance sum assured is usually between 10 to 15 times their annual income. That is:
However, as individuals' needs vary, it is better to compute the sum assured after considering existing liabilities, family needs, and future financial goals.
Term life insurance is perhaps the most basic type of life insurance, with a predetermined cover term. If an insured person's unfortunate death is within that term, the insurance company will provide the nominees a lump sum (death benefit).
Let’s look at some of the key reasons why term insurance is important:
Term life insurance provides your family members with the sum assured in case of your untimely death. That money will allow them to continue their lifestyle or pay the expenses they need to meet.
If you have a mortgage or loans, term insurance would be quite helpful in clearing all these debts so that your loved ones are not burdened, which otherwise could lead to a financial hole as they manage or repay these debts on their own.
Term insurance normally offers much higher coverage at fairly smaller premiums than other life insurance policies. This makes term insurance more within the easy reach of many people who wish to have financial protection without damaging their budgets.
With term insurance, you decide the amount of coverage and duration you need. This flexibility helps customise your insurance based on your needs and financial requirements.
Premiums paid on term insurance are tax deducted under Section 80C of the Income Tax Act. Death benefits are commonly tax-exempt under Section 10(10D).
Term insurance offers peace of mind as it secures your family's future. You can concentrate on your career and personal life without fearing the financial stress that will hit your loved ones in your absence.
Choosing the right sum assured or coverage is the most important thing when buying a term plan. In fact, it needs consideration of several factors, which include:
This determines how much you need now and in the future to pay off loans, mortgages, children's education, and daily living expenses. The right amount will be assured based on this assessment.
When calculating the sum assured, include your outstanding loans, whether personal loans, car loans, or other mortgages. The goal is to ensure that the coverage at least covers these liabilities so your loved ones are not left with significant debts.
How many dependents are relying on your income? Generally speaking, larger families need a higher sum assured.
To provide extra protection, you can add other benefits, such as critical illness or accidental death benefits, to your policy.
To sustain your family lifestyle, you need coverage that can replace your income for a longer period. The sum assured should be at least 10-15 times your current annual income.
ACKO Life Flexi Term Plan is a modern, highly flexible, and customer-centric solution for long-term financial protection from ACKO. This plan provides a unique level of policy flexibility unmatched by most traditional insurers. The convenience of managing the entire policy lifecycle digitally adds to its appeal, particularly for individuals who prioritise ease of use and adaptability.
This unique plan from ACKO stands out in the market due to several key differentiators.
You won’t have to pay higher premiums that typically increase with age or inflation adjustments over time.
It allows for seamless modifications to both the Coverage Amount (Sum Assured) and Policy Duration. This flexibility means that you can increase or decrease your coverage based on your evolving life circumstances, such as marriage, buying a house, or having children.
A fully digital policy management system is offered. Policyholders can easily make any policy adjustments (endorsements) such as:
Learn what common myths about term plans you must dispel so you are better armed to protect the people you love.
While it's true that term life insurance may seem most relevant when people first start a family, the truth is anyone with dependents can benefit from it.
While good health impacts the premium, a person with a pre-existing illness can also get an insurance policy. It either happens at a higher premium or with certain conditions.
Term insurance is one of the least complex types of life insurance. It is the most straightforward form of life insurance, primarily designed to provide a death benefit.
Another myth is that term insurance only covers younger people. Although premiums are probably higher, most life insurance companies allow older applicants to get policies.
Although your existing health or group insurance is pretty good, these policies replace nothing in case of death. On the other hand, a term insurance plan replaces income lost in case of your untimely demise.
Term insurance is a long-term investment, so thoroughly evaluating your financial requirements is essential in selecting the right plan for your family and their future needs. When calculating the sum assured, include your outstanding loans, whether personal loans, car loans, or other mortgages. The goal is to ensure that the coverage at least covers these liabilities. A term plan calculator estimates the sum assured and the premiums involved for an effective budgeting strategy.
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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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