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Term Insurance Plan for ₹75 Lakh Online in India
Term insurance is crucial in financially securing your loved ones when planning for the future. A ₹75 lakh term insurance plan is one of the most sought-after coverages for individuals aiming to provide substantial financial support in case of an untimely demise.
This article explains everything you need to know about term insurance for ₹75 lakhs in simple terms, covering its benefits, eligibility, premium costs, types, and why it could be the right choice for you.
Table of Contents
75 Lakh Term Insurance Plan Overview
Here’s a table summarising the key aspects of a 75 lakh term insurance policy:
What is a 75 Lakh Term Insurance Plan?
Term insurance is a pure life protection plan that provides financial coverage for a specific period or "term" of your life. Term insurance offers a straightforward approach: if the policyholder passes away during the policy term, the nominee receives the entire sum assured.
For a 75 lakh term insurance plan, your family will receive ₹75,00,000 in the event of an unfortunate circumstance. However, it does not offer maturity benefits if the policyholder survives the term, making it one of the most affordable options for high coverage.
How Does a ₹75 Lakh Term Insurance Plan Work?
Term Insurance Plan is the essential component of any healthy financial portfolio. More than an investment option, it is a financial tool that secures your family's financial future and provides you with much-needed mental peace. A term insurance plan with a sum assured of 75 lakhs works as follows:
Coverage Amount
The plan provides a sum assured of 75 lakhs, which is the amount your beneficiaries will receive in the event of your death during the policy term.
Policy Term
This is the duration for which the insurance is active. Depending on the plan, it can vary from 5 to 30 years or more.
Premiums
You pay regular premiums (monthly, quarterly, semi-annually, or annually) to keep the policy active. The premium amount is based on age, health, and policy terms.
Death Benefit
If the policyholder passes away during the policy term, the nominee receives the sum assured of 75 lakhs.
Maturity Benefit
Term insurance plans do not offer maturity benefits. If the policyholder survives the policy term, there is no payout.
Rider Benefits
Some plans offer additional riders, such as accidental death benefits or critical illness coverage, for an extra premium.
Tax Benefits
Premiums paid for term insurance can qualify for tax deductions under Section 80C of the Income Tax Act, and the death benefit is tax-free under Section 10(10D).
Illustration of 75 Lakh Term Insurance
Illustration of 75 Lakh Term Insurance
Mr Arun, a 40-year-old software developer, decided to secure his family's future. He purchased term insurance that would provide a sum of ₹75 lakhs if something happened to him. He has been committed to paying a premium of ₹19,000 annually for 20 years.
He set up an auto-debit system to ensure he never missed a payment. The premium was deducted from his bank account each year, and he received a confirmation from the insurance company.
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Is a 75 Lakh Term Insurance Plan Sufficient for You?
Case 1: Mr. Arjun
Arjun is a 30-year-old teacher who lives with his wife, Meera, and their young son. His annual income is ₹10 lakhs. They own a small house with a mortgage of ₹40 lakh, and Arjun has saved some money for emergencies and his son's education.
Arjun buys a ₹75 lakh term insurance plan to protect his family if something happens to him. Given their current situation, this plan provides:
Mortgage Coverage: ₹75 lakh is more than enough to pay off the mortgage, so Meera can keep the house without financial stress.
Education Fund: It covers their son's education expenses until he finishes college.
For Arjun, the ₹75 lakh coverage is sufficient because it meets his family's immediate and future financial needs.
Case 2: Ms. Priya
Priya, age 45, is a successful entrepreneur with an annual income of ₹30 lakhs. She owns a large house with a high mortgage ₹65 lakh, has significant investments, and has big plans for her children's higher education and business expansion.
Priya opts for a ₹75 lakh term insurance plan. However, considering her financial situation:
Mortgage Coverage: The ₹75 lakh is enough to fully pay off her mortgage.
Business Continuity: Her business needs additional funds to keep running smoothly and cover potential losses if she is not around.
Education and Future Planning: The amount isn't sufficient to cover her children's higher education and other long-term goals.
Priya needs more than a ₹75 lakh term insurance plan. She requires a higher coverage amount to fully protect her family's financial future and meet all her commitments.
Note: The golden rule for having enough coverage is to “Review Your Term Insurance Every 5 Years” to ensure it covers all your increased liabilities and expenses.
Why Choose a 75 Lakh Term Insurance Plan?
Benefits of 75 Lakhs Term Plan
A 75 lakh term insurance plan provides substantial financial coverage to the policyholder's beneficiaries during their untimely demise. Here are the benefits:
High Sum Assured
Provides a significant payout of ₹75 lakhs to beneficiaries in case of the policyholder’s death.
Financial Security
Ensures financial stability for family members or dependents by covering essential expenses.
Affordable Premiums
Term plans generally offer higher coverage at relatively lower premiums than other policies.
Tax Benefits
Premiums paid are eligible for tax deductions under Section 80C of the Income Tax Act.
Customisable Coverage
Policies can often be tailored with riders for additional protection, like accidental death benefits.
Loan Protection
Can cover outstanding loans or debts, preventing a financial burden on the family.
Long-Term Coverage
It covers the entire term, which can be as long as 30-40 years, depending on the policy.
Simplicity
Straightforward and easy to understand, with no investment component, focusing solely on protection.
Who Should Buy a 75 Lakh Term Insurance Plan?
1. Those Looking for Financial Protection on Their Debts
A loan is an essential financial companion in times of need. Be it a lifestyle elevation like buying a new car, moving into a new house, renovation or some life goal like marriage or education, a term insurance policy serves as a reliable shield against unforeseen circumstances.
Buying a term plan of the loan equivalent amount ensures that the outstanding loans are settled without burdening family members.
2. Pre and Post Retirees
As people approach retirement, most of their liabilities are over home loans, child education, etc. In most cases, they just need to take care of the basic lifestyle and necessities for themselves and their dependents.
Thus, a 75 lakh term insurance plan can provide sufficient coverage, alleviating the stress of financial commitments for dependents in the unfortunate demise of the policyholder.
3. Those Pursuing Higher Education
Pursuing higher education can be costly, given that most of the higher education courses are highly expensive. It becomes even more difficult for people with dependents, given the liability it brings along.
Suppose Mr. A, age 35, decides to pursue an executive MBA. The fee for the course is 40 lakhs, for which Mr A borrows an education loan. For the duration he finishes his course and pays off the loan, 75 lakh term insurance could cover this added liability.
This protection ensures that the dependents don’t have to deal with financial turmoil of the education loan liability in case of their unfortunate demise.
4. Those Looking for Charitable Contributions
Individuals with philanthropic inclinations can utilize a 75 lakh term insurance policy to support charitable causes. They can designate the death benefit payout to charitable organizations or causes, ensuring peace of mind that they have done their part for society and made a positive impact.5. Those Looking to Supplement their Existing Coverage
You might have a term plan covered by your employer or one from the younger days that now seems insufficient due to added liabilities. In such a case, you can get 75 lakh term insurance.
This supplementary coverage offers extra protection for the family's long-term financial well-being. It acts as a prudent measure, addressing unforeseen circumstances that may surpass the existing policy's coverage.
Eligibility Criteria for ₹75 Lakh Term Insurance
The exact eligibility criteria may vary slightly between different insurance providers. The following table provides a general overview.
Documents Required for ₹75 Lakh Term Insurance Plan
To purchase a 75 Lakhs term insurance plan, applicants are required to submit the documents listed below:
Identity & Address Proof
- Aadhaar Card
- Passport
- Voter ID
- Driving License
- PAN Card
Income Proof
- Salary slips (last 3 months)
- IT returns (last 3 years)
- Form 16
- Bank statements (last 6 months)
- Profit & Loss account (for self-employed)
- Balance sheet
Age Proof
- Birth Certificate
- School/College Leaving Certificate
- Passport
- Aadhar Card
Medical Report
Other Documents
- Policy Proposal Form
- Nominee Details
- Photograph
- Bank Account Details
How to Choose the Right Life Coverage for Yourself?
How to Choose the Right Life Coverage for Yourself?
Choosing the right life insurance is essential for securing your financial future and giving you and your loved ones peace of mind. But how much coverage do you need? Let's break it down:
Assess Your Life Goals
Start by thinking about what you want to achieve in life. Are you focused on supporting your family, paying for your children's education, or leaving something behind for your loved ones? Your goals will guide you in deciding how much coverage you need.
Consider Your Financial Liabilities
List your debts, like mortgages, loans, and other financial commitments. Your life insurance should be enough to cover these, so your family won't be burdened if anything happens to you.
Evaluate Your Health and Lifestyle
Your health and habits can affect your insurance costs. For example, if you smoke or have pre-existing health conditions, your premiums might be higher. Being upfront about your health helps you find the right coverage.
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Factors to Consider Before Buying a 75 Lakhs Term Insurance Plan
When considering a 75 lakhs term insurance plan, it’s crucial to examine several factors to ensure it adequately meets your needs and provides sufficient coverage for your family. Here are the primary aspects to consider:
Financial Assessment
Determine the appropriate coverage by evaluating your personal needs, current liabilities, future expenses, and the amount required to protect your family. Ensure the plan aligns with your financial objectives.
Claim Settlement Ratio
The claim settlement ratio indicates the percentage of claims an insurer has settled in a given year. A higher ratio suggests a greater likelihood of your claim being processed smoothly.
Premium Affordability
Ensure the premium is within your budget. Compare options from different insurers and decide on a payment plan that suits you, whether it's regular payments, a single lump sum, or various frequencies like annual, biannual, quarterly, or monthly.
Term Duration
Select a policy term that matches your financial responsibilities. For example, if you need coverage to match a loan duration, choose a term that aligns with the loan period. For early earning years, a shorter term might be appropriate, with a plan to reassess as your responsibilities grow.
Rider Options
Evaluate additional riders, such as critical illness coverage, accidental death benefits, and premium waivers in case of disability. These riders can provide extra protection tailored to your needs.
Policy Exclusions
Review all policy exclusions to avoid surprises when you need to claim. Understanding where your policy may not provide coverage will help set realistic expectations and facilitate informed decision-making.
Inflation
Consider the inflation factor when determining the coverage amount. What seems adequate today might not be sufficient due to rising costs.
Common Reasons for 75 Lakhs Term Insurance Plan Rejection
1. Attempting Suicide
Insurance policies typically include a suicide clause, which often states that if the insured commits suicide within a specified period (usually one or two years) from the start date of the policy, the claim will not be paid.
Additionally, if the insurer suspects that the application is an attempt to exploit this clause, they may reject the policy.
2. Participation in Hazardous Activities
Individuals involved in high-risk activities such as skydiving, scuba diving, motor racing, and other extreme sports are deemed high-risk. Insurers may reject applications or impose higher premiums to account for the increased risk of death.3. Self-Inflicted Injuries
Policies generally exclude coverage for deaths resulting from self-inflicted injuries. If there is evidence that the applicant has a history of self-harm or suicide attempts, coverage may be denied.4. Criminal Activities
Deaths resulting from criminal activities, including involvement in illegal acts, violence, or membership in criminal organisations, are usually excluded from coverage. Insurers may also reject applicants with a criminal record to mitigate risk.5. Substance Abuse
Abuse of substances such as alcohol or drugs 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, such as chronic diseases like diabetes, heart disease, or cancer, are considered high-risk. Insurers may either reject these applications or offer coverage with exclusions and higher premiums.7. War and Terrorism
If an applicant is involved in a profession or resides in a region prone to war or terrorism, the insurer may deny coverage to avoid potential large-scale claims.8. Non-Commercial Aviation
The risk associated with aviation accidents is significant. Insurers may refuse to accept applications or charge higher premiums for individuals engaged in aviation activities outside of commercial airline travel, such as pilots, crew members, or frequent flyers in non-commercial aircraft.Tax Benefits for 75 Lakhs Term Insurance Policies
Section 80C: Premium Payments
Under Section 80C, you can claim a tax deduction on the premium paid for your term insurance policy, with a maximum limit of 1.5 lakh INR annually. This benefit applies to both individuals and Hindu Undivided Families (HUFs).
Eligibility:
- The premium should 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 April 1, 2012.
Section 10(10D): Maturity Benefits
According to Section 10(10D), any amount received from your term insurance policy, including the death benefit, is exempted from tax.
Conditions to Qualify:
- The premium must not exceed 10% of the sum assured for policies issued on or after April 1, 2012.
- The premium must not exceed 20% of the sum assured for policies issued before April 1, 2012.
- If your policy does not meet these conditions, a Tax Deducted at Source (TDS) of 5% will apply if the payout surpasses 1 lakh INR in a financial year.
Section 80D: Health Riders
Section 80D provides additional tax deductions if your term insurance policy includes health-related riders such as critical illness or accidental death coverage.
Deduction Limits:
- If you are below 60, you can claim a deduction of up to 25,000 INR.
- As a senior citizen, you can claim a deduction of up to 50,000 INR.
FAQs about 75 Lakh Term Insurance Plan
What is the premium amount for a ₹75 lakh term insurance plan?
Who should consider buying a ₹75 lakh term insurance policy?
What is the ideal term duration for a ₹75 lakh term insurance plan?
Can I add riders to a ₹75 lakh term insurance policy?
What happens if I outlive my ₹75 lakh term insurance policy?
Is ₹75 lakh term insurance sufficient for a high-net-worth individual?
How do I file a claim for a ₹75 lakh term insurance policy?
Can I increase my coverage amount from ₹75 lakh to a higher sum assured?
What documents are required to purchase a ₹75 lakh term insurance policy?
Are there tax benefits associated with a ₹75 lakh term insurance plan?
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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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