With rising inflation and lifestyle-related diseases, it has become vital for all to safeguard their family’s future in advance. And one of the best ways to ensure this is to buy a robust term life insurance policy. A term plan ensures that your family never faces any financial stress and lives a peaceful life if something happens to you.
Over the years, a term insurance policy has gained immense popularity amongst Indian insurance buyers. Many people prefer buying a one crore term plan because they believe it will give their family financial protection in their absence. However, a five-crore term plan is slowly overtaking its popularity.
What is a 5-crore term insurance plan?
A 5-crore term plan is just like standard term insurance that provides a life coverage of 5 crores. In the event of the policyholder’s untimely demise during the policy period, the insurer pays the amount to the beneficiary.
The most significant benefit of a 5-crore term plan is that it assures sufficient financial protection to your family after you. Also, just like any other term plan, you can buy this policy at an affordable premium compared to other life insurance plans with similar coverage.
The premium is lower if you buy the policy at a young age. The earlier you buy the policy, the lower the premium. Not to mention, if you buy the policy online, you may get additional savings than purchasing the same plan offline.
Does a 5-crore term plan offer enough protection?
When you compare term insurance plans, you may feel tempted to purchase a 5-crore cover. While the eight-figure number may be enough to cover your family’s needs, you must be prudent while making your purchase decision. Choosing the right plan requires proper planning and understanding of what the plan offers. You must assess your needs and choose a plan that you think can best fulfil those needs.
Before choosing the term insurance coverage amount, you must consider your family’s current lifestyle, the number of dependents, future expenses, debts (if any), etc. Most insurance experts recommend following the rule of thumb, the term insurance cover must be at least ten times your annual income.
However, it is not a hard and fast rule. Depending on your financial condition, you may need higher coverage, or a 5-crore term plan would be more than sufficient for your family.
Since term insurance is highly customisable, you can choose the right coverage to suit your needs and budget.
When it comes to buying insurance, every person has different needs. If you have a small family with only your spouse and child as dependents, a 5-crore term insurance plan could be enough. But, if you want to cover other family members like parents and siblings, you may need a bigger sum assured. The bottom line is there is no one-size-fits-all term plan.
Assess your family’s insurance needs and premium payment capacity and choose the right term plan accordingly. But for most part, a term plan with 5-crore coverage should be sufficient.