₹1 Crore Term Insurance

How does the ₹1 Crore term insurance plan work?

A ₹1 Crore term insurance plan provides a strong financial safety net for your loved ones in exchange for regular, affordable premiums. Here’s an explanation of how it works in India, with an example:

1. Choosing the Plan and Life Cover

• Sum Assured: Based on his annual income, liabilities, future financial goals, and existing savings, Vijay decides on a ₹1 Crore term insurance cover. In the event of his demise, his family will receive a payout of ₹1 Crore.
• Policy Term: To cover his earning years and major financial responsibilities such as home loan repayment and his child’s education and marriage, Vijay chooses a policy term up to age 60 (Some plans allow coverage for up to 100 years).
• Premium Paying Term: Being a salaried professional, Vijay opts for regular annual premium payments throughout the policy term. Alternatively, one may choose:
  • Limited pay: Pay premiums for a shorter duration (5, 10, or 15 years)
  • Single pay: Pay the entire premium as a lump sum
• Premium Calculation: Using a term insurance premium calculator, Vijay checks his estimated premium based on factors like age, gender, smoking habits, sum assured, policy term, and premium-paying option.
• Adding Riders: To enhance coverage, Vijay adds riders⁵ such as a critical illness rider and an accidental death rider. Other optional riders include waiver of premium, hospitalization cover, etc. which can be selected based on individual needs.
• Nominee Selection: Vijay nominates his wife as the beneficiary. Upon his demise, she will receive the ₹1 Crore payout.

2. Application and Underwriting Process

• Application Form: Vijay submits his personal details, income information, medical history, and other required disclosures to the insurer.
• Medical Tests: Based on the information provided, the insurer may request medical tests to assess Vijay’s health condition.
• Underwriting: After evaluating Vijay’s details and medical reports, the insurer decides whether to approve the policy and at what premium. In some cases, the insurer may increase the premium or reject the application.

3. Policy Issuance and Premium Payment

• Policy Issuance: Once the application is approved and the first premium is paid, the term insurance policy is issued.
• Free-Look Period: Vijay gets 30 days (for online purchases) to review the policy terms and cancel it if unsatisfied. This is known as the free-look period.
• Premium Payment & Tax Benefits: Vijay pays his premium annually on the due date. Premiums paid are eligible for tax⁶ deductions under Section 80C of the Income Tax Act, up to ₹1.5 Lakh.

4. Payout of the Sum Assured

• Death Benefit: If Vijay passes away during the policy term, his wife will receive the ₹1 Crore sum assured, which is tax-free⁶ under Section 10(10D) of the Income Tax Act.
• Survival Benefit: Standard term insurance offers no maturity benefit. However, since Vijay opted for a return of premium plan, he will receive 100% of the premiums paid if he survives the policy term.
• Rider Benefits: If Vijay is diagnosed with a covered critical illness during the policy term, the critical illness rider provides a lump-sum payout to help manage treatment and recovery expenses.

What are the benefits of buying ₹1 Crore term insurance?

The key benefits of buying ₹1 Crore term insurance policy are:

Large coverage at low premiums

A term policy for ₹1 Crore provides substantial life cover at affordable premiums. As it is a pure protection plan without any investment component, it offers high coverage at a lower cost, especially when purchased early in life.

Financial security for your family

In the unfortunate situation where you pass away, the amount paid helps family to manage daily expenses and ensure that their lifestyle is maintained. Additionally, it fulfils future purposes like education and wedding expenses.

Clear current debts

The death benefit can be used to repay outstanding liabilities such as home loans, personal loans, or credit card dues, ensuring your family does not face financial pressure due to unpaid debts.

Complete coverage with add-on options

You can enhance your term insurance plan by adding riders⁵ such as critical illness cover, accidental death benefit, waiver of premium, or return of premium to strengthen overall financial protection.

Reduce your annual taxes

Premiums paid towards term insurance are eligible for tax⁶ deductions under Section 80C of the Income Tax Act, while the death benefit received by the nominee is tax-free13 under Section 10(10D), subject to applicable conditions.

Flexible premium payment options

Term insurance plans offer flexibility in how premiums are paid. You can choose monthly, quarterly, or annual payments or opt for limited or single premium options based on your financial comfort.

Payout options for benefits

Insurers provide different payout choices, including lump-sum payments, monthly income, or a combination of both, allowing beneficiaries to manage finances efficiently over time.

Why buy a ₹1 Crore term insurance plan?

Buying ₹1 Cr term life insurance ensures affordable financial protection for your family. In addition to tax⁶ benefits and flexible coverage options, it ensures that your loved ones can manage expenses, repay debts, and stay financially secure in your absence. 

Extensive coverage

The term plan can offer an extensive life cover of up to ₹1 Crore for the chosen policy tenure.

Affordable premium

Despite offering such extensive coverage, a ₹1 Crore term plan can have quite affordable premiums if you select a reasonably long policy term. It means you can not only protect your family with better coverage but also avoid paying higher premiums to avail of this coverage.

Policy tenure

You can decide on the ₹1 Cr life insurance policy tenure based on the requirements of your dependent family member and your future money goals.

Option to increase life cover

Term insurance plans are designed to protect your loved ones from life’s uncertainties at different stages in your life. With a ₹1 Crore term insurance cover, you can increase your coverage at different life stages to ensure better protection for your family members.

Flexibility

The ₹1 Crore term insurance plan provides flexible features to customise the policy based on your financial needs. For instance, you can choose the premium payment options and the payout options.

Premium payment options

• Single payment: Pay the premium as a single payment during policy inception.
• Limited premium payment: Pay the premium for a limited term of the policy tenure while ensuring the benefits throughout the policy tenure.
• Regular premium payment: Pay the premium regularly throughout the policy tenure.

Furthermore, you can determine a convenient premium payment frequency for the limited and regular premium payment methods, such as monthly, quarterly, semi-annual, annual or one-time payment.

Payout options

• Lump sum: The sum assured will be paid as a lump sum to your family.
• Regular income: The sum assured will be paid as a regular income for a defined income period.
• Combination of lump sum and regular income: The sum assured will be provided as a combination of the lump sum and regular income.

Riders

The simple life cover of a term insurance plan can be easily boosted with optional riders⁵ that protect you against critical illnesses, major and minor illnesses and injuries, accidental death and disability, hospitalisation, and many other risks. These riders can be added to your term plan for an extra nominal premium.

Long-term coverage

You can get insured in the ₹1 Cr term insurance policy for a long term, such as 10 to 40 years. The longer the term insurance policy period, the more affordable the ₹1 Crore term insurance premium.

Return of premium³

You can choose to receive the premiums paid for the ₹1 Crore insurance policy as a maturity benefit at the end of the policy tenure by availing of the return of premium option.

Simple and easy to understand and purchase

A ₹1 Crore term policy offers a simple life cover with no savings or investment components. All you need to do is select a suitable policy option, pay timely premiums, and ensure life cover protection for your family. Furthermore, you can purchase the term insurance plan online in a few simple steps.

Eligibility age criteria for buying a ₹1 Crore term plan

The eligibility age criteria for buying a ₹1 Crore term plan are:

• Minimum entry age: The minimum age to purchase a ₹1 Crore term plan is 18, since 18 is the legal age to enter into most financial contracts, including insurance policies.
• Maximum entry age: Generally, insurance companies offer term life insurance plans for individuals up to 60-65 years of age for a sum of one crore. However, insurers also offer specialised plans for those aged 70 or older. It is recommended that you speak directly with an insurance company regarding these plans.
• Premium impact: Premiums are influenced by age. It is advantageous to purchase a crore term plan at an early age, for example in your 20s or 30s, since low perceived health risks ensure lower premiums.

Who should opt for a ₹1 Crore term insurance policy?

This table outlines who should consider a term life insurance of ₹1 Crore and the key reasons for choosing it.

Factors to consider before buying a ₹1 Crore term plan

Consider the following factors before buying a ₹1 Crore term plan:

Claim Settlement Ratio

When choosing a ₹1 Crore insurance policy, always check the claim settlement ratio of the insurance provider. This factor is crucial as it indicates the number of claims settled by the insurer compared to the number of claims filed by customers during a financial year.
Tata AIA Life Insurance has constantly upheld its promise of protection and on-time claim settlement. Tata AIA Life Insurance reported a 99.41% individual death Claim Settlement Ratio for FY 24-25⁷.

Solvency Ratio

If your insurance provider cannot settle your claims, the problem could be their solvency ratio, which refers to their financial capacity to pay the claims. Look for a high solvency ratio, indicating the company’s financial strength and ability to settle your claim entirely.

Additional protection

Add-on rider⁵ options provide additional financial protection in case of specific scenarios during the policy tenure. For instance, the rider for the waiver of premium benefits waives future premiums if you suffered a total or permanent disability in an accident.
Similarly, riders can offer additional financial protection for critical illnesses, terminal illnesses, accidental death and dismemberment, etc.
At Tata AIA Life Insurance, we offer multiple rider benefits with Tata AIA Health Buddy. You can avail benefits like Accidental Health Benefit, Accidental Total & Permanent Disability Benefit, Critical Illness Cover, Hospitalization Cover, OPD benefits, Wallet for vaccinations, etc. Choose the benefit you want and add it to your Term plan.

Enhanced and flexible features

₹1 Crore term insurance plans must be flexible to customise based on your financial needs. Look for flexible features to help you pay premiums conveniently, increase coverage based on your needs, and choose between varied payout options.
In addition, ₹1 Crore term life insurance plan can also provide in-built privileges, such as the in-built critical illness cover, terminal illness cover, etc. Term plans with in-built privileges provide enhanced protection at an affordable premium for the long term.
At Tata AIA Life Insurance, we offer the below riders with our Term Insurance plan.

How to determine the right coverage amount?

To determine the right coverage amount, first you need to understand the factors to consider and then the calculation process

Your age & income

Age and income are important factors that help determine the right coverage amount. For example, if you are young and have fewer responsibilities, you can start with a coverage amount, which you can increase as your financial obligations increase.
Or you can opt for a more extensive cover at a young age, for a longer tenure, thereby locking in low-term insurance premium payments.

Purpose of buying insurance

Term life insurance offers an extensive life cover that different people may utilise for various needs. While someone may want to ensure the future financial stability of their family, another may want to protect their loved ones from the financial impact of unpaid debts.
Hence, identifying why you and your family need a certain amount of coverage can help you plan an appropriate term insurance amount.

Dependants’ needs

Not all families have the same financial needs and commitments, and therefore, a term plan cannot serve the same purpose for everyone.
Term insurance is flexible and can be suited for those with different needs. If there are financial requirements unique to your family, the term insurance plan should be selected accordingly
Always consider the needs of all your family members before getting the term insurance policy.

Liabilities

If you have financial liabilities such as ongoing EMIs and unpaid debts, having a term insurance plan with adequate coverage can help you keep your family safe from the impact of these obligations in your absence.
Also, remember to consider any health conditions that can lead to hospitalisation. You can also add health riders⁵ to your term plan and enhance the coverage in case there is a need to meet medical expenses.

How to choose the best term insurance plan for ₹1 Crore?

Consider the points given below to choose the best term plan for your needs:

Determine the right policy tenure

Choose the term insurance policy term for as long as you need to protect your family. Ensure that the plan can offer coverage when you most need it and until you can comfortably pay all the premiums on time.

Find term insurance plans and their eligibility criteria

Research and find ₹1 Crore insurance policy options that can suffice for your financial requirements based on their features and eligibility criteria.

Analyse and compare the term insurance plan options

Analyse the chosen options and compare them based on their features, benefits, and premium rates to decide on the best term insurance plan for ₹1 Crore for your financial needs.

Determine claim settlement ratio

Determining the claim settlement ratio is crucial to ensuring the life cover benefits when your family is in utmost need of it in your absence. We at Tata AIA Life Insurance have registered a death claim settlement ratio of 99.41% for the FY 2024-25⁷.

Customise the term insurance policy

Customise the term plan for ₹1 Crore by choosing a suitable premium payment option, premium payment mode, payout option, etc., to ensure it meets your financial conditions and requirements.

Choosing a convenient premium payment mode, monthly, half-yearly, or annual, is crucial to staying insured for the entire policy tenure.

Consider including riders

Riders⁵ provide additional financial benefits to enhance coverage during specific scenarios. For example, the rider for the accidental death benefit provides additional funds if the death is due to an unexpected accident during the policy tenure.

Calculate the ₹1 Cr term insurance premium

Upon deciding on the term insurance policy option and customising it to your needs, you can calculate the premium. Ensure to find an affordable premium for the entire policy tenure. 

You can utilise our Tata AIA Life Insurance Term Plan Calculator to determine the sum assured and the affordable premium to make a well-informed financial decision.

How to buy the best term insurance plan for ₹1 Crore online?

Here’s how you can buy term plan at Tata AIA:

• Search for ‘Tata AIA Term Insurance Calculator’ on Google.

• Enter information such as your full name, date of birth, gender, tobacco usage, mobile number, and email ID.

• Click on the ‘Calculate Premium’ button to see the premium amount for a ₹1 Crore term insurance plan.

• Choose optional riders⁵ or add-ons with Tata AIA Health Buddy like critical illness cover or accidental death benefit based on your needs. Check the revised premium after adding the add-on benefits.

• Fill in any additional required details and proceed to complete the payment to purchase the policy.