Protecting one’s family members’ future is of utmost importance, and building a robust financial foundation is deemed crucial to ensure that. However, the uncertainties of life can emerge as barriers to such plans. That’s why having a comprehensive 2 crore term insurance plan could prove to be a safety net, especially when the insured is no longer around to offer financial support to their loved ones. A substantial coverage will help beneficiaries take charge of financial burdens and existing obligations with more ease, protecting their hard-earned savings from financial strain. However, beyond the robust sum assured, the comprehensive term plan also offers additional features.
In this article, let’s discuss the key characteristics of a 2 crore term insurance to explore if it’s the right fit for their needs and could help secure the family’s future.
Key Features of Two Crore Term Insurance
Here are some of the main features and associated benefits of 2 crore term insurance policy –
Wide Coverage: A 2 crore term insurance plan will act as a solid shield that will protect individuals from the impact of financial burdens even when the insured is no longer with them. The plan’s comprehensive death benefit will help tackle the beneficiaries’ existing loans, outstanding EMIs, and daily household expenses, freeing the family from relying too much on their savings or withdrawing from their fixed deposits. Moreover, individuals can include riders for critical illnesses, premium waivers, and accidental death, in the base plan to strengthen their financial protection aspect.
Affordable Premium: A two crore is indeed a robust coverage, but that does not mean the premium will cost a fortune. Typically, insurance plans provide individuals with comprehensive coverage but at an affordable premium rate, making the policy easy on the pocket. It is more like an investment where the investment amount is a manageable cost. Regardless, it is suggested to check one’s financial standing and opt for a premium payment plan that suits one’s pocket and needs. In addition, individuals can use term insurance premium calculator to understand their estimated coverage and accompanying premium amount better.
Helps save more: The affordable premium helps individuals park their money into other financial instruments such as mutual funds, fixed deposit schemes, ULIPs, pension plans, and retirement plans to expand their portfolio and build funds. This helps individuals to focus on the financial safety of their family and allows them to save up for future needs. However, the perfect cover tends to depend on one’s financial standing and needs and the security they are looking for, on the other hand, investments depend on financial goals and mostly risk-taking capacity. Since no size fits all, individuals should check and compare different plans, their cover, exclusions, and payment options to make informed choices.
Factors to consider to get the right coverage
Individuals should weigh the following factors to find the best-suited coverage that will help them meet their needs and safeguard their future –
- Age: With increasing age, an individual’s medical journey takes a different turn with health issues becoming more prominent. This affects the overall cost of getting life insurance, as insurance providers perceive that aging individuals are more at risk and prone to make claims earlier than younger individuals. In order to balance the risk, insurance companies inflate the premium for older adults. This is why all experts recommend individuals start insurance early in life to get higher coverage at lower premiums. Individuals can use an online term insurance calculator to understand how one’s age impacts the cover amount and premium.
- Annual Income: The insurance provider checks and analyzes the applicants’ income to determine which insurance plan would fit their budget and meet their needs. Before applying, individuals can use an online term insurance calculator to find their costs and the coverage amount they would require, without straining their actual finances. Understanding one’s affordability through such an online tool helps pick a plan that is designed to cater to their needs and more importantly their budget.
- Current Liabilities: Individuals should add all their current and potential liabilities before selecting an insurance cover. The key is to add all current loans, ongoing EMIs, and outstanding payouts to make an informed decision. Typically, a plan like the smart total elite protection plan could be enough to help account for current and potential liabilities and extend a safety net to loved ones. However, individuals must learn to balance their expenses and learn financial planning to maintain greater control over their debts and obligations and prevent them from spiraling.
Why should you get a 2 Crore Term Insurance Plan?
Whether a 2 crore term plan is suitable depends on several factors and where the applicant is standing in their life stage. Typically, the plan is considered to be useful for individuals who are in these situations –
Young individuals who plan to build a successful career and safeguard their family members from unexpected situations benefit from the plan. A cover of Rs. 2 crore is adequate to help secure the financial future of loved ones and help them meet their financial goals even in the absence of the insured.
Individuals who are the only earning members of the family can benefit from the comprehensive coverage. It will allow the insured and their family members to account for their financial worries with more ease and keep up their current living standard even in the absence of the insured.
Those with existing loans and future obligations can cushion the impact of hefty debts with the cover and protect their family from bearing the burden of its repayment. This is extremely useful in those cases where the individual has multiple dependents. Regardless, insurance coverage is a personal choice and it should be based on several circumstances, including financial standing, future goals, family requirements, etc.
A 2 crore term insurance plan is designed to help insurance buyers safeguard the financial future of their loved ones and also gain more control of their future. Such a plan helps build a safety net and allows individuals to make their financial plan more effective and reliable. However, the success of the plan will also depend on the other features and exclusions. So, individuals should focus on those aspects as well and check the limitations of the plan to understand how to compensate for the lags.