Building a safe and secure financial future for one’s family should be everyone’s top priority, and having a proper financial plan in place is the key to ensuring it. However, sometimes things do not go as planned. In such a situation, having a two crore term insurance policy proves to be handy in more than one way. Typically, a 2 crore term insurance policy extends a substantial sum assured, ensuring the insured’s family can deal with financial obligations such as existing loans, education expenses, and rising cost of living without dipping into their hard-earned savings. Such a plan also goes beyond the basic coverage, offering multiple features to tailor the same to their family’s needs.
In this article, let’s explore more about 2 crore term insurance plans to understand their functionality and benefits.
What are the features of a 2 crore term insurance?
These are the key features of a 2 crore term insurance policy –
Coverage
Even when the sole breadwinner is no longer with the family, a comprehensive can help ensure that the beneficiaries are not buried under debt. The two crore insurance cover acts as a financial safety net, eliminating stress related to loan repayment, timely payment of EMIs, and household expenses. This also ensures that they do not need to dip into their savings or emergency fund and can tide over the tough time with confidence. Individuals also have the option to further strengthen the coverage by adding relevant riders or add-ons to their base plan. This helps tailor coverage as per the family’s need and allows them to account for their certain needs.
Suitable premium
Contrary to popular belief, a two crore term policy plan can fit into one’s budget with ease. This is because the plan’s premiums are designed keeping in mind the majority of an individual’s finances and their responsibilities. Such an approach helps ensure that individuals can comfortably pay the premiums on time and safeguard the future of their family. Individuals typically have the option to choose a premium payment schedule that works best for them. Whether the premium is monthly, annually, or just a lump sum, the policy buyers have greater control over how they choose to pay for their cover.
Helps mobilize money
A comprehensive insurance policy like a smart total elite protection plan typically comes at an affordable rate that does not necessarily drain an individual’s savings. This offers the flexibility to explore other financial instruments and saving plans to invest in and build a corpus for achieving financial goals. In other words, the term plan extends security, whereas, the low premium helps mobilize savings towards investment options, such as mutual funds, pension plans, Unit Linked Insurance Plans, or retirement plans to build a corpus. Individuals who start their insurance early are well-positioned to avail of comprehensive coverage at a relatively low premium, facilitating greater savings on premiums.
What to consider to get the right kind of coverage for your needs?
Individuals should consider multiple factors to avail of the right of coverage. Typically, the goal should be to check the factors and compare them across plans to understand which offering suits them the best –
Age: As we grow in age, our health risks also keep increasing, making us risk-prone for insurance companies. To balance the intensity of risk, individuals typically charge older applicants a relatively higher premium than what they charge younger applications. To ensure that one gets high coverage but at a low premium from an insurer, individuals should consider getting insurance early in their life. Individuals can use a term insurance calculator to determine the cost they are likely to bear and understand which plan will fit their budget the best. Based on this individuals regardless of their age can plan their future more effectively and have contingencies in place.
Income: Insurance companies carefully weigh the income to ensure that the applicant will be able to pay for the insurance premiums on time. This also helps them to present insurance quotes that are most eligible for the applicant and allows them to make an informed decision. Individuals can also check how their income will impact their coverage and premium in advance by using an online term insurance calculator and develop a suitable approach to cover their financial safety needs without burdening their budget.
Existing liabilities: Before applying for two crore insurance, individuals must check their financial standing. They should take into account all their existing loans, outstanding EMIs, and other liabilities to gain a better understanding of their standing. This helps allow them to choose the right kind of insurance cover to deal with the accompanying liabilities. Ideally, a comprehensive cover like a 2 crore term plan could prove immensely useful in accounting for the obligations. This will ensure effective protection of one’s future and also protect them from major financial hiccups.
Do you need a 2 crore term insurance policy?
The answer is definitely subjective as the same depends on several factors and situations. However, having a substantial cover tends to prove beneficial in the following cases –
Individuals who are the sole breadwinner of the family and have young dependents could benefit from having a 2 crore term plan. Such a plan will help safeguard their future and ensure that the dependents are well taken care of even in the absence of the insured.
Those with substantial financial obligations and existing liabilities such as mortgages, loans, and EMIs can benefit from a comprehensive cover. It will help the beneficiaries to pay off their obligations without dipping into their limited savings.
Individuals with ambitious financial goals for their family members such as a child’s higher education, house of mortgage, etc, can benefit from the plan. Typically, life cover with an investment aspect can help those looking to retire early in life.
Sole breadwinners can also safeguard the future of their loved ones with a 2 crore term insurance plan. It will help the dependents become financially stable and account for liabilities with ease.
Those planning to build a medical corpus to take care of critical illness can consider taking a critical illness rider on 2 crore insurance and build a robust financial safety net for their future.
This is how a 2 crore term insurance plan comes in handy in more than one way and helps safeguard the financial future of the insured and their family. However, the success of the plan will depend largely on the features of the plan and how easily the insurer settles the claim during an emergency.
