3 Crore Term Insurance Policy: Everything You Need To Know
Term insurance policies are affordable and are also useful in creating a legacy for your children. The original definition of a term plan was a pure life cover for a specific term. However, new-age life insurers now offer whole life insurance policies that extend even up to the age of 99. Saving money to build a corpus is a great way to plan for your future. This method is useful in creating wealth, albeit, in the long run. Risks to life and health do not come with advance notification.
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What is Term Insurance?
Term life insurance is the most reliable way to financially safeguard your family with a huge corpus irrespective of when the almighty comes calling. The family can still sustain and children can continue education as you had planned and envisioned. Besides this reason, savings can go haywire when there are financial and health emergencies. Having a comprehensive term insurance policy that gives a guaranteed sum assured and additional benefits in case of accident or total permanent disability is highly recommended.
Why do I Need 3 Crore Term Insurance?
A life cover of 3 Crore guarantees to pay for the liabilities of the family and can help fulfil their lifestyle requirements in the absence of the bread earner. A policy that offers to pay a 3 Crore cover offers the death benefit to the nominees in the event of an unfortunate demise of the policyholder during the tenure of the policy. The best part about term plans is that they are low-cost, high-cover options that offer long tenures.
Six Reasons to Buy a 3 Crore Term Plan
You can have multiple reasons to buy a three-crore term plan. Some of the important reasons would be as given below:
1. Dependent Parents and Spouse/Children
You are now married, have kids and are trying to settle down in life. But no one knows what the almighty has planned. A substantial corpus in the form of life insurance can be useful in helping the family stay afloat in case fate decides to snatch you away from them.
2. Earlier the Better
A 3 Crore term policy is cheaper when bought earlier. Purchasing at 35 will work out cheaper as compared to buying at 45. The premium increases significantly with age. Moreover, you run the risk of remaining uninsured for that long. Understand why you should buy a term plan early.
3. Health
For younger applicants, some insurers may not mandate a health check-up (prior to policy issuance). However, if it comes to that you should undergo a health check to avoid a policy cancellation letter. Health check-ups, for older applicants, are almost a mandatory prerequisite. If you happen to have some ailment then, the insurance company may either refuse a policy or may substantially increase the premium.
4. Inheritance
If you are 30, you may pay a premium of Rs.4,000 per month to avail a life cover of Rs.3 Crore. If you pass away at the age of 68, your family will benefit from the inheritance of Rs.3 Crore. Instead, if you invest Rs.4,000 per month in a fixed or recurring deposit, offering a 5%-7% rate of interest, you may, at best, accumulate about Rs.1 Crore-Rs.1.5 Crore.
5. Loans
If you have availed of secured loans, the lender may attach/auction the asset to recover the dues. A Rs 3 Crore life insurance policy can help your family clear such dues and still lead a reasonably comfortable life.
6. Tax Benefits
Save money, otherwise payable in taxes, by investing in life insurance policies. The term insurance premium of up to Rs. 1.5 lakhs is deductible under section 80C of the Income Tax Act.
Conclusion
Some people suggest one must avoid insurance-cum-investment products since the charges are more. However, it may not be true for someone who wishes to achieve multiple goals of wealth creation and life coverage. Finding a balance is the key. A Rs 3 Crore Term Insurance policy is not a fancy amount but a harsh necessity in today’s world that is facing severe inflation, economic uncertainties and challenges in healthcare.
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