What is a Rs. 2 Crore Term Insurance Plan?

A 2 crore term insurance plan is an insurance policy that has been designed to offer you a robust coverage of Rs. 2 crore as sum assured. This money is disbursed to the police nominee in the event of unforeseen incidents that are covered under the terms plan. This substantial amount is deemed suitable aid for the insured’s family in their absence as it can help the beneficiaries meet their financial obligations and needs without hassles. So you can consider availing a 2 crore term insurance plan to help safeguard the future of your family’s financial independence. They can use the sum in the future to meet unwarranted expenses, rising cost of living, or meet financial obligations such as outstanding loans, cost of education, mortgage, etc. This plan would be more suitable for you if you have more than one dependent in your family. There are several reasons to opt for a two-crore term insurance plan. It is important to know their scope, limitations, and benefits before you purchase the policy.

What are the Main Reasons to Purchase Two Crore Term Insurance Policy?

These are some of the reasons why you should consider buying a 2 crore term insurance plan –

A comprehensive two crore term insurance plan can offer your family members a crucial financial security blanket that can act as a replacement for your income in your absence. The substantial amount can help cover an array of expenses such as everyday costs to your planned obligations.

Often inadequate financial cover drives the dependent members of a family to cut corners and even seek financial help from others to sustain their daily lifestyle or expenses. However, a sum of Rs. 2 crore can help them cover most of their financial needs easily. Getting a plan with a 2 crore sum assured will help your dependents cover ongoing expenses, meet sudden financial needs, and have a safety net for unwarranted situations. The high amount will offer you peace of mind where you know your family members will be well taken care of and will be able to retain their current living standard without depending on others.

In case you have children, a term insurance plan with a 2 crore sum assured will help safeguard your child’s safety. The financial support will help them avail the best quality of education and life they deserve even in your absence. This planning will alleviate strain from your family members and allow your spouse to take care of your child’s needs with much ease. They can use the substantial cover amount to meet the child’s education expenses and even their marriage. Furthermore, the policy payout can be used to support their future goals, which will ease their stress and allow them to focus more on their professional goals. This way the fund will offer them the required jumpstart.

A two-crore term plan will also help you customize your coverage as per your needs. You may include riders or add-ons to increase your coverage. For instance, you may add critical illness cover or premium waiver addons which are applicable to your plan and enhance your protection cover as per needs. However, adding riders can inflate your premium so make sure to include add-ons that are crucial for you.

Two crore term plans are also affordable as contrary to your belief, they come at a cost-effective premium amount. Since the premium amount is heavily influenced by the policy buyer’s age, lifestyle habits, and even occupation, it is highly recommended to start insurance early to avail 2 crore sum assured at a low premium.

How Does a 2 Crore Term Insurance Plan Work?

A two-crore term insurance plan has features the same as regular term life policies. For this plan, you need to pay a prefixed premium to the insurance company that keeps the insurance protection cover active.

This premium amount is influenced by several factors such as age, medical condition, lifestyle habits, and required coverage. The depth of influence can be understood better if you use an online term insurance calculator. The tool can be used for free and is easy to navigate just like an SIP calculator online. You will notice that with an increase in age and existing health conditions, the premium you pay will increase. This is because with age your perceived risk will also increase. So it is advised to purchase insurance early to avail an extensive coverage for an affordable premium.

The sum assured is paid to the policy beneficiary in the event of sudden demise of the insured. So, in such a situation your family members would be able to access the money, given their claim is approved by the insurer. This is why it is highly recommended that you be familiar with the claim process and terms and conditions. Similarly, it is important to inform and educate your beneficiaries about the claim process so that they can file a policy claim and access the sum assured with limited hassles. Typically, you will get the flexibility to choose the payout option. You may either choose a regular income option or go ahead with a lump sum amount payout. It is advised to account for one’s expenses and frequency to understand which payment option would be best suited for your dependents.

How to Choose a Two Crore Term Plan?

While the high sum is a lucrative feature of a two crore term insurance, you should also factor these to make an informed decision – 

Policy Premium

Premium cost is a crucial factor of consideration when comparing term plans. Typically, a high sum assured would accompany a high premium. However, your goal should be to pick a substantial cover that meets your needs and a premium that is easy on your pocket. You can use a premium calculator to understand the cost of availing insurance. Additionally, make sure to check payment frequency to understand how you need to plan your premium payout.

Claim Settlement Ratio

This ratio demonstrates the percentage of claims an insurance company has settled out of the total claims received in a year. Typically, a claim settlement ratio of over 90% is deemed good. It suggests that your preferred insurance company has settled a majority of the claims it received in a year. Every year the insurance company shares its term insurance claim settlement ratio for public reference. Your role here is to check the claim settlement ratio of the last few years and pick a company with a consistently high ratio. This way you can be sure the insurer would be more than likely to settle your family’s claim.

This aspect makes a two-crore term insurance plan lucrative. However, it is recommended that you compare different plans and read their terms and conditions to understand which one is best suited for your needs.