You work hard for the most part of your life to give your loved ones a comfortable life. However, life doesn’t always go as planned. If you are in the best of your health, you might not be tomorrow. In case of an unfortunate incident, your family should not be left without a sound financial support system.
It is crucial to plan your investments and finances early in life so you can start saving up for the future. Purchasing the best term insurance plan for 1 crore can aid this goal. A 1 crore term insurance plan is a sizeable amount that can be your family’s guard against financial troubles.
But before you go on and buy the best 1 crore insurance for your family, here are the things you should be mindful about.
1. Make Sure It Meets Your Expenses
1 crore term plan is indeed an adequate coverage, however, if you are expecting it to be enough to meet heavy expenses such as education fees, debts, and medical bills, along with your family’s future cost of living, then depending on the best term insurance plan for 1 crore is not a sound choice. Instead, consider getting health insurance. But why do you need health insurance? Because it protects your savings. Additionally, life savings on top of a term insurance plan is recommended if your family’s future involves heavy expenditures.
2. Disclose Every Information
It’s your duty as a policyholder to reveal every relevant detail while buying the best term insurance plan for 1 crore. This includes the policies you already have, your medical condition, and your lifestyle habits such as smoking or drinking. Any non-disclosure of such information can affect your claim settlement. An insurance company has the right to reject your claim if there is any inconsistency found.
3. Consider Claim Settlement Ratio
However, when you are buying the best term insurance plan for 1 crore, ensure that you are buying it from the right insurer. The right insurer won’t always be the one that promises you a cheaper premium and maximum benefits. The right insurance company would be the one that does not only promise claim settlement but fulfils it. This is indicated by a claim settlement ratio.
A claim settlement ratio is the amount of the claims settled by the insurance company as compared to the claims made.
A high claim settlement ratio not only increases the probability of claim settlement but indicates the existence of a streamlined claim process.
4. Term Insurance Policies Do Not Cover All Deaths
Much to the surprise of many, the best term insurance plan for 1 crore does not provide cover for deaths that are caused by drugs, suicide, HIV Aids, and adventure activities. However, all natural deaths are covered. The exclusions are in place to prevent fraud, reckless behaviour and suicide.
5. There’s One Kind of Term Insurance that Offers Survival Benefits
Life insurance products have two most distinct features such as survival benefit and death benefit. Survival benefit is the sum assured + additional bonuses that the policyholder gets if they survive the term. While death benefit is when the nominee gets the sum assured in case of the untimely demise of the policyholder.
However, a 1 crore term plan only has a death benefit feature, not survival benefits, except for one type of term insurance, i.e., The Return of Premium. The Return of Premium, as the name suggests, pays back the total premium paid by the policyholder. It is to be noted though that there are no returns or additional bonuses, as there is in a standard life insurance policy.
6. Buy Term Insurance as Early as You Can
Buying the best term insurance plan for 1 crore in your 40s, might not be the brightest idea. As fitness levels reduce and you become most susceptible to diseases, premium increases. That’s why buying term insurance in your 20s and 30s is recommended if you want to avoid high premium.
7. Choose Policy Term Wisely
As a term period is a duration in which a 1 crore term plan provides financial protection to your family, you have to ensure that you do not choose a term period that is not long enough. The best term insurance plan for 1 crore comes with the advantage of a longer-term period. So, when you are selecting the best term insurance plan for 1 crore, choose a policy term that covers you at least till your retirement.
Buying a 1 crore term plan is a must-buy product if you are looking to provide financial security for your loved ones. Now that you know all things to keep in mind including the general advice by IRDAI, buying a 1 crore term plan would be easy.