Safeguarding the financial future of one’s dependents is vital to ensure that they remain self-reliant and can continue to lead their life without straining their limited finances even in the absence of the insured. In this regard building a reliable financial protection shield with plans like 2 crore term insurance can prove useful in safeguarding the financial interest of one’s dependents. Such a robust financial safety net will not only provide the dependents with the necessary financial aid to meet their immediate obligations but will also act as a buffer as they slowly get back on their feet recovering from their loss.
While the 2 core coverage is extensive, individuals should look beyond the sum assured to gauge the full extent of the policy and its limitations. Typically, individuals should check factors like insurance features, exclusions, and terms of claims to understand their scope and plan their finances accordingly.
Here’s what individuals need to check the main features of a 2 crore term insurance plan to gauge its scope more effectively.
What are the Main Features of a Two Crore Term Insurance?
The main features of a two-crore term plan include –
- High coverage value
A 2 crore term insurance serves as a financial shield that helps the policyholder’s dependents lower their financial burden in the event of unforeseen emergencies or sudden demise of the insured.
The high cover value allows individuals to empower their dependents to take care of their immediate financial needs. In addition, it helps them meet their fixed financial obligations, outstanding loans, bills, and EMI with ease long after the insured’s death. This helps them meet their obligations without pushing them to dip into their savings or withdraw their fixed deposits.
Such a plan also allows individuals to extend their extent of coverage by allowing them to add rider benefits to the base plan. Typically, they can choose to add one or more riders such as critical illness policy cover, policy premium waiver, and accidental death cover, to extend their coverage. However, such add-ons come at an additional cost.
- Affordable insurance premium
Contrary to popular notion, the premium of a 2 crore term insurance plan is not expensive and significantly affordable. Notably, insurers designed such a comprehensive plan to help individuals build financial protection. To ensure its accessibility they kept the premium of the plan affordable. However, it should be noted that the premium amount tends to be influenced by several factors including age, income, coverage needs, and debt standing. To understand how each factor impacts one’s eligible premium and coverage, individuals can use an online term premium calculator and check their influence.
How do Different Key Factors Influence Policy Coverage?
This is how different factors impact insurance coverage –
Income: Individuals’ income plays a key role in deciding one’s insurance coverage. Typically, insurers weigh income to understand their level of risk when it comes to defaulting payment. To elaborate, they check whether or not the income of the individuals would be enough to pay for the premium without delaying or defaulting. However, it is always recommended to ensure that one’s financial capacity can support the premium amount and not add to one’s budgetary strain. They can use a term insurance calculator to check whether the estimated premium would suit their financial budget or not and if they will be able to pay it on time.
Obligations: Insurers also weigh the ongoing obligations of the insurance buyer which includes their ongoing loans, EMIs, and other obligations. This helps them understand the financial liability of the buyer and whether they would overburden themselves with the premium. Individuals who are aware of their entire financial burden are better equipped to determine whether the premium would add pressure to their current financial standing or not. It is recommended that individuals also weigh their fixed upcoming obligations to determine the bulk of financial cover their dependent would need to meet them effortlessly even in the absence of the insured.
Age: The age of the insurance buyers decides the amount they would pay for insurance coverage. As per the perceived notion, older individuals are deemed to be more prone to developing critical illness and age-induced disorders. This makes their case more likely to lead to an early claim. On the other hand, younger applicants are deemed to be healthier and less likely to raise a claim at least in the first few years of the policy term. This is why older applicants are likely to avail of a lower coverage value but at a high premium compared to younger individuals. The component of risk plays a key role in this regard. The higher the perceived level of risk, the more will be the amount of premium.
Who Will Benefit from a Term Insurance Plan?
Individuals who have just started working and have little to no financial obligations to take care of can benefit significantly from taking a 2 crore term insurance plan. This is because a young application with fewer financial burdens can avail of a higher cover at a lower premium amount. This will help them to build a comprehensive financial safety net for their dependents at a steady pace.
On the other hand, the sole breadwinner of the family can benefit from this plan. The extensive coverage will allow them to build a financial safety blanket for their family members and ensure that their needs are taken care of even when the insured is no longer in the picture. It will especially come in handy for those with multiple financial obligations and active outstanding loan accounts. The comprehensive sum assured will help the beneficiaries pay off the debt and use the remaining sum to buffer their financial needs.
In these ways, a 2 crore term insurance plan can help individuals safeguard the future of their dependents. However, individuals are suggested to check their needs and assess the features of the policy and its limitations to understand whether the same will suit them or not.
