We all wish to safeguard our loved ones, even when we're not there. One of the most effective ways to do this is by opting for term insurance. A term life insurance provides your family with financial help in case something untimely happens to you. These plans are easy and cost-effective. You pay a little each year, and in return, your family receives a huge amount of money if you're not around.
Nowadays, most people prefer taking a 1 crore term plan. That is, if the life insured dies within the policy tenure, the nominee (generally a family member) receives ₹1 crore. However, before you purchase such a plan, you must understand whether you are eligible or not. In this blog, we'll dissect the eligibility factors for a 1 crore term insurance plan in the simplest manner.
Why Term Insurance Matters
Life is unexpected. We don't know what will happen, but we can plan. Term insurance is a safeguard for your loved ones. If you pass away, the insurance provides them with the funds they need to cover bills, manage daily needs, or even pay off loans.
It’s not just for people with big incomes. Even if you’re earning a modest salary, term insurance gives your family a strong financial backup. It brings peace of mind, something that is priceless.
What Is a 1 Crore Term Plan?
A term plan for 1 crore is one kind of term life insurance in which the insurance provider assures to pay ₹1 crore to your family in case you die during the policy term. It's a good idea, particularly if you are the principal breadwinner in your family.
This high cover amount keeps your family financially secure when you are not around. It's particularly helpful for individuals with kids, mortgage loans, or older parents. And the best part is, it's cheaper than many imagine, particularly if you purchase it earlier in life.
Eligibility Criteria for a 1 Crore Term Plan
Now let's learn the minimum requirements that you must fulfill to purchase a 1 crore term insurance policy. Don't worry, most of them are easy and straightforward.
1. Age Requirement
The majority of insurance providers sell term plans to individuals aged 18 to 65 years. Some providers even provide a plan up to 70 years of age. The younger you are, the higher your chances are of getting a lower premium.
For instance:
● If you're healthy and 25 years old, your premium will be very low.
● If you're 45 years old and have some medical problems, the premium could be higher.
So, it’s always better to start early.
2. Income Requirement
To be eligible for a high cover like ₹1 crore, your income matters. Insurance companies usually check if your income can support such a large cover.
In plain language, they don't want you to over-insure yourself. For instance, if you have an income of ₹5 lakhs a year, they might not sanction a ₹1 crore cover unless there is a compelling reason. Anywhere between 10 to 20 times your annual income is what most companies let you insure.
So:
● ₹5 lakh yearly earnings = ₹50 lakh to ₹1 crore cover
● ₹10 lakh yearly earnings = ₹1 crore to ₹2 crore cover
You'll need to provide proof of income, such as:
● Salary slips
● Income tax returns (ITR)
● Bank statements
3. Health Conditions
Your health matters a lot. The insurance company needs to understand how healthy you are. You'll be questioned about:
● Existing diseases
● Surgery or hospitalisation
● Smoking/drinking habits
● Family medical history
You might also be required to undergo a medical test. It's easy and mostly free. It might comprise:
● Blood pressure check
● Blood test
● ECG or other medical checks
If you're healthy, you'll qualify easily and could even be offered lower premiums. But if you have some health issues, the company might:
● Charge a higher premium
● Provide a lower cover
● Or even reject the proposal at times
Be truthful here. Always provide accurate information. Concealing health problems can result in a rejected claim later.
4. Lifestyle Choices
Smoking, alcohol, and adventure sports can influence your eligibility and premium rate. For instance:
● A smoker will be charged more than a non-smoker.
● A person who goes skydiving regularly might be charged a higher premium.
But don't panic. Even if you smoke, you are able to obtain term insurance. It may cost slightly more, though.
5. Citizenship or Residency
Most Indian insurers provide term plans to Indian citizens and Non-Resident Indians (NRIs). You can still apply if you are an NRI. The process would be a bit different and you may be asked to undergo a medical test in your present country of residence or on a visit to India.
Documents such as passport, visa, and proof of income will be needed.
6. Policy Tenure
When you select a term plan, you also determine how long the coverage lasts. This is referred to as the policy term. Most people select a term ending at retirement age.
Example:
● If you're 30 years old, you can select a 30 or 35-year policy term.
● If you're 40 years old, you could select a 20 or 25-year policy term.
The longer the policy term, the more your family is covered.
Documents You'll Need
Here's a basic list of documents typically requested:
● ID proof (Aadhaar, PAN, Passport)
● Address proof
● Income proof
● Age proof
● Medical test reports (if required)
● Photograph
All this can be completed online nowadays. Some organizations even have paperless policies.
Tips to Get Approved Easily
Apply early: Lesser age = less premium and greater chances of approval.
Be honest: Always provide accurate information regarding health and lifestyle.
Keep documents ready: Helps in quicker processing.
Go for a medical test if asked: It shows you’re serious and confident about your health.
Compare plans: Every insurer has different rules. Check a few options before choosing one.
In Short
A 1 crore term plan is a wise investment to secure your family's future. It's cheap, easy, and provides peace of mind. To avail of it, you simply have to fulfill some general eligibility criteria based on age, income, health, and lifestyle.
Remember:
● Start early
● Be honest
● Choose a reputable insurer
● Read the policy document carefully
Protecting your family does not have to be difficult. A little planning today can lead to a big difference tomorrow.
If you are looking to purchase term life insurance, in particular a 1 crore term plan, now is the best time to take action. The earlier you begin, the simpler and less expensive it will be.
Show your family how much you care for them through financial security, because peace of mind is the greatest gift you can share with them.
(The views, opinions, and claims in this article are solely those of the author’s and do not represent the editorial stance of The Assam Tribune)