Parenting is not easy. It entails not only nurturing the child but also providing for their financial future. If you are a single parent with full custody, your responsibilities treble. While raising the child alone, it is your exclusive job to build a foundation for his or her secure future. This is where Rs 2 crore term insurance can help. You can always use the term life insurance calculator to determine the premium affordability and policy tenure before making a purchase decision. The basic aspects of 2 crore term insurance are covered in this post.
First of all, what is a Rs 2 crore term insurance policy?
A 2 crore term insurance plan provides an assured life cover of Rs 2 crore for a minimal premium payment. If the policyholder dies prematurely within the policy term, the sum promised is paid as a death benefit. The 8-figure death benefit can help your loved ones get through the crisis without having to struggle financially, and the premiums are designed in such a way that it won’t hurt your pocket while you pay the premiums.
Why does a single parent require a Rs 2 crore term insurance plan?
A single parent is solely responsible for their child’s future. Given how uncertain life is these days, it is critical to ensure that he or she does not encounter financial difficulties after your demise. Thus, establishing a sufficient corpus ahead of time is critical. You should also keep in mind that pricing and living costs will rise in the long run. As a result, the amount you select to save for your child’s future should be sufficient to cover his or her future expenses. A Rs 2 crore term insurance coverage can provide your child with a fair sum if you die unexpectedly.
Features and Benefits of Rs 2 crore Term Insurance
The following are the primary features and benefits of Rs 2 crore term plans.
High coverage at a reasonable premium: If you start early, you can get a Rs 2 crore term plan for low monthly prices. Furthermore, the premium remains stable throughout the insurance period, ensuring no additional financial hardship. The term life insurance calculator can help you find the best premium rate you can afford.
Wholesome security for your child: The high coverage amount as a death benefit will protect your child from financial hardship. It will not only help him/her keep his/her current lifestyle and achieve life goals, but it will also help him/her avoid debt by settling any outstanding loans.
Understanding term insurance coverage: The amount of term insurance coverage you require should be determined using a simple calculation: the sum assured should be between 10 and 25 times your annual salary.
If you are finding it difficult to decide your coverage amount basis the premium for the same then you can use a term insurance calculator to calculate your cover and premium.
If you are young and have recently begun earning, your term plan sum assured can be as much as 20 – 25 times your yearly salary. For those who are aged 30 to 50, the sum assured can be approximately 10 to 15 times their annual income as it aligns with their income. As your income grows, you can adjust your term insurance coverage accordingly.
Tax benefits: The Rs 2 crore term life plan benefits you as well as your child. Section 80C of the Income Tax Act of 19611 exempts premium payments of up to Rs 1.5 lakh per year from taxation, and death and maturity benefits are tax-free subject to section 10 (10D).
Helps you build a corpus to beat inflation: Given rising inflation rates, it is critical to plan for the future by factoring in currency devaluation. A 2 crore term insurance plan serves as a hedge against inflation. By choosing this policy, you ensure that your child’s financial needs are appropriately addressed, even in the face of inflationary pressures. The sum assured of one crore will hold its value, offering a dependable safety net for your loved ones’ financial security.
Peace of mind: One of the most important benefits of a 2 crore term insurance plan is the peace of mind it provides. Knowing that your child will be financially secure even in your absence helps reduce stress and worry. This peace of mind allows you to concentrate on other elements of your life, such as career advancement, personal development, and leaving a legacy, without having to worry about the financial consequences of an unexpected incident.
Factors to consider before purchasing a Rs 2 crore term insurance plan.
- As a single parent, it is critical to select the best 2 crore term insurance plan based on your requirements and budget. The following are the factors you should consider:
- Different plans have varying premium rates. Use the term life insurance calculator to find the best premium rate for your budget.
- Check out the additional riders available with various plans before deciding on the type of insurance you need.
- Every policy plan has some coverage exclusions. Before making a purchase, make sure you read and understand them completely.
- Examine the claim settlement and solvency ratios of the insurance companies you are considering. It will protect you and your family from potential problems later on.
- Remember to factor in inflation when determining how much your child will require in the future. Consider a higher rate while planning your child’s financial future.
- Every insurance company will have a claim settlement ratio listed on their website. The statistic represents the percentage of claims settled in the previous fiscal year. A greater claim settlement ratio indicates a better likelihood of receiving your reward.
Are term insurance riders necessary?
Term insurance riders can offer additional financial protection, but they are not usually required. Individuals who work in factories or travel frequently for employment may have more need for an accidental death rider than a stay-at-home mother. You should select the riders according to your specific requirements. Remember that the riders and add-ons you choose will affect your term plan premium.
So in the end,
Being a single parent is not easy. Make your life easier by using the term life insurance calculator to choose the best Rs 2 crore term plans. One significant reason why 2 crore term insurance is a popular option of coverage is that it can cover a wide range of unforeseen risks and situations in addition to your child’s future fundamental requirements.
