Simplifying Life Insurance in India
Term Insurance Plan for 10 Crore Online in India
The 10 Crore Term Insurance Plan is designed to offer substantial financial security to your family in case of an unforeseen event. With a high coverage amount, this term insurance plan ensures that your loved ones are protected from financial burdens, enabling them to maintain their lifestyle and meet future financial goals.
This plan is particularly beneficial for individuals with significant financial responsibilities, such as business owners or high-income earners, as it provides peace of mind and a robust safety net.
Table of Contents
10 Crore Term Insurance Plan Overview
Here’s a table summarising the key aspects of a ₹10 Crore term insurance policy:
What is a 10 Crore Term Insurance?
A 10 Crore term insurance provides a sum assured of 10 crores to the beneficiary in case of unfortunate demise of the policyholder during the policy term. Thus, 10 Crore here refers to the sum assured amount.
This insurance offers significant financial protection to the insured's beneficiaries, ensuring a sizeable payout to help cover expenses and maintain their financial well-being. Term insurance is the most basic and cost-effective way to secure a high coverage amount; hence, it doesn't provide any maturity value.
How Does a 10 Crore Term Insurance Plan Work?
Anyone in the financial space will always emphasise the importance of a term plan for a healthy financial portfolio. However, the amount of sum assured required depends on individual needs.
Here is how a 10 crore term plan works:
- Sum Assured: A 10 crore term insurance policy provides a sum assured, i.e., a coverage of 10 crore rupees.
- Policy Term: The policy has a specified term, chosen when buying the policy, during which the coverage is active.
- Premium Payments: Policyholders pay regular premiums, as per their chosen payment frequency, to keep the policy in force. Term insurance is generally cheaper than other life insurance types since it provides only life coverage. Thus, we can buy a pure term insurance with a high coverage amount at a lesser premium than other types of life insurance.
- Death Benefit: In case of the policyholder's unfortunate demise during the policy term, the beneficiaries receive the entire sum assured that is 10 crores, as a death benefit.
- No Maturity Benefit: If the policyholder survives the policy term, there is no maturity benefit since this is a term plan.
- Financial Coverage: Being a high coverage term plan, it serves as a well-built financial safety net, ensuring significant support for the family's financial needs in case of the insured's death.
- Rider Benefits: By paying an extra premium, you can select different riders to receive coverage for particular risks and occurrences. However, the rider's validity is as long as the policy is valid.
Illustration:
Let's take an example to see how the 10 Crore term plan works.Aditi, a young professional who is 35 years old, earns 80 lakhs annually. She is recently married and wants a house and her dream car. Considering the forthcoming expenses, she used a 10-crore term plan for 30 years and paid an annual premium of ₹1,00,000.
Scenario 1: Death During the Policy Term
If Aditi passes away during the 30-year term of the policy, her beneficiaries will receive the sum assured of 10 Crore. This payout can help cover various expenses and financial goals.
Scenario 2: Outliving the Policy Term
If Aditi outlives the 30-year term of the policy, the term plan does not provide any maturity benefits, meaning she would not receive any payout.
Disclaimer: The above illustration is a hypothetical example created for educational purposes only and does not represent a real-life scenario. Please read your policy documents to understand the terms and conditions clearly.
Benefits of a 10 Crore Term Insurance Plan
A 10 crore term insurance plan provides substantial financial coverage to the policyholder's beneficiaries during their untimely demise. Here are the benefits:
Financial Security for Family
Ensures that the policyholder's family is financially secure and can maintain their standard of living in case of the policyholder’s untimely demise.
Debt Repayment
Helps in repaying outstanding debts and loans, preventing the family from facing financial burdens.
Funds for Future Expenses
Provides funds for future expenses such as children's education, marriage, or other significant life events.
Customisation with Riders
Adding riders such as accidental death benefit, critical illness cover, and premium waiver allows plan customisation to suit specific needs and enhance coverage.
Countering Inflation
A high coverage amount helps counter the effects of inflation, ensuring that the benefits remain substantial over time.
Flexibility in Premium Payment
Options for annual, semi-annual, quarterly, or monthly premium payments.
Tax Savings
Premiums paid are eligible for tax deductions under Section 80C of the Income Tax Act but death benefits received by the nominee are tax-free under Section 10(10D).
Peace of Mind
Knowing that the family’s financial needs are covered offers peace of mind to the policyholder.
Why Do You Need a 10 Crore Term Insurance?
While a figure of 10 crore might seem extremely high and overwhelming, in today's world, high salaries and extravagant lifestyles have become quite common, and inflation only increases.
To have sufficient coverage that protects your dependents in an unfortunate case, a 10 Crore term insurance is the perfect solution.
Here are other major benefits that a 10 crore term insurance can provide:
- High Coverage at Affordable Premium: A 10 Crore term insurance policy provides a considerably high coverage amount at a relatively lower premium than the traditional plans with a savings component.
- Peace of Mind with Financial Security: A high coverage ensures complete financial security for the insured's family in case of their untimely death during the policy term. It takes care of debts and liabilities so that the family doesn't have to deal with this financial crisis after losing a loved one.
- Tax Benefits: Premium paid towards the term insurance and the death benefit received is eligible for tax benefits under Section 80C and 10(10D) of the Income Tax Act as per the prevailing income tax laws.
Some Relatable Real-Life Examples
Aditya Patel, Tech Entrepreneur
Aditya, a 35-year-old tech entrepreneur, runs a successful startup. His company is on the verge of a significant breakthrough, with immense potential financial rewards. Aware of the high-risk nature of his venture and the responsibilities towards his young family, Aditya opted for a 10 crore term insurance plan. This ensures his family's financial security in case of any unforeseen event.Rashi Kapoor, Medical Professional
Rashi, a renowned surgeon, is the sole breadwinner for her family. Her demanding profession exposes her to various risks. Recognising the importance of financial protection for her loved ones, Rashi invested in a 10 crore term insurance plan. This provides a substantial safety net for her family in case of unexpected medical emergencies or disabilities that prevent the doctor from working.Rohan, High-Net-Worth Individual
Rohan, a successful businessman with multiple ventures, enjoys a luxurious lifestyle. Despite his riches, Rohan recognises the temporary nature of life. To protect his family's luxury lifestyle and continuous business activities, Rohan opted for a 10 crore term insurance policy. This guarantees his family's financial security even in his absence.Who Should Buy a 10 Crore Term Insurance?
Anyone with earnings and liabilities must have insurance in their portfolio. While a basic life cover is a necessity for anyone, a 10 crore term insurance is better suited for the high-income people that fall into the following groups:
People with High Income and High Expenses
High income, in turn, elevates people's lifestyles, like big homes and expensive cars, which also bring liabilities. Thus, high-earning individuals, specifically those with more than 80 lacs to 1 crore per annum income, must have a coverage of at least 10 crores. This will provide a sizeable financial cover to their family.
Young Parents
Young parents, or the ones planning to have kids shortly, must plan a substantial amount of insurance coverage. This will ensure their kid's future, education and upbringing stay caught up if anything happens to their life.
Business Owners
Business owners, especially small and medium-scale businesses, spend most of their expenses on credit and always carry the pressure of debt. Hence, in case of their unfortunate demise, their family might also have to deal with professional liabilities while dealing with their loss. Thus, as per their liabilities and premium budget, business owners should have considerable coverage for their dependents, taking care of their financial requirements and professional liabilities.
People with Dependents
Individuals with dependent parents, spouses, or children must consider buying much insurance coverage. We know the skyrocketing costs of medical care, education, and other lifestyle expenses. In case of the unfortunate demise of the breadwinner, the family goes through financial turmoil that can be saved with a good amount of insurance coverage.
Eligibility Criteria for a 10 Crore Term Insurance
The exact eligibility criteria may vary slightly between different insurance providers. The following table provides a general overview.
Documents Required to Buy a 10 Crore Term Plan
To purchase a 10 crore term insurance plan, applicants are required to submit the documents listed below:
Note: Depending on the insurance provider, each section requires one or two documents as proof.
How to Calculate the Premium for a 10 Crore Term Plan?
To calculate the premium for a ₹10 crore term insurance plan, you need to consider several factors such as the policyholder’s age, health, lifestyle, occupation, and the policy term. Additionally, you might want to explore extra coverage options like critical illness riders or accidental death benefits.
Let’s assume a 1 crore term insurance plan details for Ravi as an example:
- Age: 30 years
- Lifestyle Indicator: Non-smoker
- Policy Term: 20 years
- Sum Assured: 10 Crore
- Riders: No additional riders
Insurers calculate the base rate based on age, health status, and sum assured. In Ravi’s case, let's assume that the base rate is ₹1.5 per thousand of the sum assured. Here is how the premium is calculated:
Base Premium = (Sum Assured / 1,000) × Base Rate
Base Premium = (10,00,00,000/1,000) × 1.5 = ₹1,50,000 per year
Ravi’s base premium comes out to be ₹1,50,000 per year. This amount reflects his age and healthy lifestyle, providing comprehensive coverage for his substantial sum assured.
While Ravi has opted not to include additional riders in his policy now, he knows he can always revisit his options. Riders such as those with Critical Illness or Accidental Death Benefits could be considered if his needs change or if he wishes to enhance his policy's coverage further.
Disclaimer: The above calculations are only for illustration purposes. For an accurate calculation, it's best to use an online premium calculator provided by insurance companies or consult with a financial advisor as they consider all the specific details and current rates.
How to Choose the Right 10 Crore Term Insurance Plan?
Compare the Premium Rates
Compare the premium rates for 10 crore coverage across different insurers.Check for Inclusions and Exclusions
One of the most critical factors to check while buying an insurance plan is its inclusions and exclusions. Be aware of all these conditions so that you don't end up being surprised during the claim settlement process.Check the Claim Settlement Ratio of the Insurance Provider
The claim settlement ratio indicates the percentage of claims settled against the total number of claims filed. The higher the claim, the more credible the company is. In simple terms, it indicates how easily and quickly your beneficiaries would receive the claim in case of your unfortunate demise, thus making this one of the most crucial factors to consider.Check for Flexibility
Check for flexibility in your policy in multiple ways, like premium payment, rider additions, etc. Some insurers also provide the option of conversion, wherein you can convert your term plan to an endowment plan in the last few years of the policy, thus building a maturity benefit. Check for all the options that maximise your returns as per your requirements.Common Reasons for 10 Crore Term Insurance Plan Rejection
1. Suicide
Most insurance policies have a suicide clause, typically stating that if the insured commits suicide within a specified period (usually one or two years) from the policy start date, the claim will not be honoured. Also, If the insurance company suspects the application is an attempt to benefit from such circumstances, they may reject the policy.2. Participation in Hazardous Activities
Individuals engaging in hazardous activities like skydiving, scuba diving, motor racing, and other high-risk sports are considered high-risk. Insurers may reject applications or charge higher premiums to cover the increased risk of death.3. Self-Inflicted Injuries
Policies often exclude coverage for death due to self-inflicted injuries. If there's evidence that the applicant has a history of self-harm or attempted suicide, the insurer may deny coverage.4. Criminal Activities
Death resulting from criminal activities, such as involvement in illegal activities, participation in violent acts, or membership in criminal organisations, is usually excluded from coverage. Insurers may reject applicants with a criminal record to mitigate risk.5. Substance Abuse
Substance abuse, like abuse of alcohol, drugs, or other substances, significantly increases health risks and the likelihood of premature death. Insurers may reject applications from individuals with a history of substance abuse.6. Pre-existing Medical Conditions
Applicants with severe or multiple pre-existing medical conditions like chronic diseases like diabetes, heart disease, cancer, etc, are considered high-risk. Insurers may reject their applications or offer coverage with exclusions and higher premiums.7. War and Terrorism
If an applicant is in a high-risk profession or region prone to acts of war or terrorism activities, the insurer may deny coverage to avoid potential large-scale claims.8. Non-Commercial Aviation
The risk of aviation accidents is substantial. Insurers may refuse to accept applications or increase premiums for individuals involved in aviation activities outside commercial airline travel, including pilots, crew members, or frequent flyers in non-commercial aircraft.Tax Benefits for 10 Crore Term Insurance Policies
Section 80C: Premium Payments
Deduction Limit: Under Section 80C, the premium paid for a term insurance policy is eligible for a tax deduction, subject to a maximum limit of 1.5 lakh INR per financial year.
Eligibility: To qualify, the premium must not exceed 10% of the sum assured if the policy is issued on or after April 1, 2012. The premium should not exceed 20% of the sum assured for policies issued before this date.
Applicability: This deduction is applicable to individuals and Hindu Undivided Families (HUFs).
Section 10(10D): Maturity Benefits
Tax Exemption: Any sum received under a term insurance policy, including the death benefit, is fully exempt from tax under Section 10(10D).
Conditions: This exemption is applicable only if the premium paid does not exceed 10% of the sum assured for policies issued on or after April 1, 2012. The premium should not exceed 20% of the sum assured for policies issued before this date.
TDS: If the policy does not meet the criteria mentioned above, a 5% tax deduction at source (TDS) will be applicable on the payout if it exceeds 1 lakh INR in a financial year.
Section 80D: Health Riders
Deduction for Health Riders: If the term insurance policy includes health-related riders such as critical illness or accidental death benefit riders, the premium paid towards these riders is eligible for a tax deduction under Section 80D.
Deduction Limit: The deduction limit under Section 80D is up to 25,000 INR for individuals under 60 and 50,000 INR for senior citizens. This limit is in addition to the limit under Section 80C.
A 10 crore term insurance plan offers your family a substantial financial safety net, ensuring financial stability in your absence. While premiums may be higher, the coverage can provide significant peace of mind, especially for high-income earners with significant dependents or liabilities.
FAQs about 10 Crore Term Insurance Plan
Can you decrease the sum assured of a ₹10 crore term plan?
Does a ₹10 crore term insurance have a surrender value?
What should be the tenure of my ₹10 crore term insurance policy?
What are the eligibility criteria for purchasing a ₹10 crore term plan?
What is the premium amount for a ₹10 crore insurance plan?
What happens if I survive the ₹10 crore insurance policy tenure?
What are the factors to consider when buying term insurance for ₹10 crore plan?
Does ₹10 crore term insurance have higher premiums compared to other plans?
What is the minimum and maximum age limit to apply for ₹10 Crore Term Insurance?
Can I customise the policy term for ₹10 crore term insurance?
Is there an option for joint coverage in ₹10 crore term insurance?
What happens if I miss paying the premium for ₹10 crore term insurance?
Can I increase the coverage of my ₹10 crore term insurance?
What happens if I want to cancel my ₹10 crore term insurance policy?
What is the claim settlement process for a ₹10 crore term plan?
Claim settlement for a ₹10 crore term insurance plan involves the nominee notifying the insurer in a timely manner and submitting required documents such as the death certificate, policy documents, and medical records.
The insurer then investigates the claim and, if valid, payouts the sum assured to the nominee within 30 days of receiving all necessary documents, as per IRDAI regulations. Larger claims might necessitate additional verification.
What health conditions could increase premiums or rejection for a ₹10 crore term insurance plan?
How do high-risk occupations impact eligibility and premium for a ₹10 crore term insurance?
What are the specific circumstances under which a ₹10 crore term insurance policy can be terminated or lapsed?
How does the concept of suicide clause apply to a ₹10 crore term insurance plan?
How much tax do I pay on ₹10 crore term insurance?
What happens if I survive the policy tenure?
Other Important Articles Related to Term Insurance
Disclaimer
- This is an informative article provided on 'as is' basis for awareness purpose only and not intended as a professional advice. The content of the article is derived from various open sources across the Internet. Digit Life Insurance is not promoting or recommending any aspect in the article or its correctness. Please verify the information and your requirement before taking any decisions.
- All the figures reflected in the article are for illustrative purposes. The premium for Coverage that one buys depends on various factors including customer requirements, eligibility, age, demography, insurance provider, product, coverage amount, term and other factors
- Tax Benefits, if applicable depend on the Tax Regime opted by the individual and the applicable tax provision. Please consult your Tax consultant before making any decision.
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