Life is not predictable. At times, everything goes according to plan, and at other times, they don’t. That is the reason it is necessary to prepare for the future. One of the most sensible ways of doing this is by purchasing term insurance.

Term insurance is an easy life insurance policy. It provides financial assistance to your family in case of your untimely death. This money supports them to lead their life without major concerns. If you are the one who brings income to the family, then term insurance is highly necessary for you.

Let’s learn what term insurance is, how much cover is sufficient, and what things you must know while purchasing a plan between ₹50 lakh to ₹2 crore.

What is Term Insurance?

Term insurance is a type of life insurance policy that provides money to your family when you die during the term of the policy. It is referred to as a “term” policy since it protects for a specific duration, such as 10, 20, or 30 years.

For instance, if you purchase a term plan for ₹1 crore for 30 years, and if something untoward happens to you within those 30 years, then your family will receive ₹1 crore.

The greatest advantage? It is highly economical. You can avail of high coverage such as ₹50 lakh, ₹1 crore, or even ₹2 crore at a very nominal monthly cost.

Why Do You Need Term Insurance?

Suppose you are the one who pays for your house loan, school fee of your child, medicines for your parents, and day-to-day expenses. Now think – what will your family do if you are no longer there?

That’s why term insurance is so helpful. It provides your family with cash when they need it most. They can spend this money on:

• Settling rent or EMIs
• Education and school fees
• Day-to-day living expenses
• Medical requirements
• Planning for the future

With term insurance, you can sleep easily, knowing that your loved ones will be taken care of.

Make use of a Term Insurance Calculator

Several individuals feel perplexed regarding the amount of cover to opt for. Should it be ₹50 lakh, ₹1 crore, or ₹2 crore?

You can make use of a term insurance calculator to get the correct answer. It is a simple online tool. Just put in your age, income, and a few other details. It will inform you:

• How much coverage you require
• What premium you will pay every month or annually
• Which plan can you afford

This tool guides you to make intelligent choices without any ambiguity.

Let’s Understand With Raj’s Example

Raj is 30 years old. He has a salary of ₹50,000 per month. He has a wife, a small child, and elderly parents. Raj employs a term insurance calculator. With reference to his age and salary, the calculator recommends that he purchase a term plan of ₹1 crore for 30 years.

The monthly premium of this plan is roughly ₹700. In case anything untoward happens to Raj, his family will receive ₹1 crore. This amount can be used to pay EMIs, rent, and secure their future. It’s a small cost for ultimate peace of mind.

What to Check Before Purchasing Term Insurance

A lot of insurers provide term insurance. While purchasing, consider these points:

• Claim Settlement Ratio: This indicates the number of claims paid by the insurance company. Always select a company with a high percentage (over 95%).
• Premium Amount: Compare the premium amounts of various plans. Some may provide similar cover for less money.
• Policy Term: Select a term equivalent to your working life. Most people prefer to cover up to age 60 or 65.
• Riders and Add-ons: Some policies provide additional cover for accidents, critical illness, or disability. These are a bit more expensive but provide additional security.
• Online or Offline: Purchasing online is generally less expensive and quicker. But if you require assistance, you can also take assistance from an agent.

Advantages of Term Insurance

• High cover at low premium: Even ₹500 – ₹1000 per month may provide you with ₹1 crore cover.
• Easy to understand: It’s not such a complicated insurance plan as others.
• Assists your family: They receive a lump sum to take care of their life.
• Tax advantages: You can get tax deduction under Section 80C of the Income Tax Act.

Myths Regarding Term Insurance

“I’m too young to need insurance.”

No. The younger, the less premium. Better to purchase early.

“My office gives me insurance.”

Yes, but normally a low amount (₹5–10 lakh). Also, you lose it if you switch jobs.

“It’s costly.”

Not at all. Term insurance is the most affordable life coverage.

Selecting Between ₹50 Lakh, ₹1 Crore, and ₹2 Crore Plans

The suitable amount is based on your income, dependents, and future aspirations.

• ₹50 Lakh: Suits individuals with lower income or fewer dependents.
• ₹1 Crore: Suits middle-income families with loans and children.
• ₹2 Crore: Suits high-income earners or big families.

Always opt for a cover that is 10 to 20 times your salary per year. You can calculate the exact figure using a term insurance calculator.

When Should You Buy Term Insurance?

The time is now. The sooner you buy, the lower your premium will be. If you delay, your health can change and premiums might go up. Older individuals might also be required to undergo medical tests before approval.

Don’t wait for the “right” time. If you have others who are dependent on you, insure yourself today.

Final Tips:

• Give accurate information in the format
• Don’t conceal your illness or smoking habits
• Inform your relatives about the policy and how to make a claim
• Every 2–3 years or after major life events (such as marriage or having children), look over your policy

Conclusion

Purchasing a term insurance policy is one of the wisest things you can do. It provides your family with financial security and peace of mind if you are not around. Whether you opt for ₹50 lakh, ₹1 crore, or ₹2 crore, the idea is the same, to secure your loved ones.

Utilize a term insurance calculator to select the best plan. Compare various policies, inspect the benefits, and choose what is apt for you. Ultimately, it’s not about money. It’s about responsibility, love, and care.