All you need to know before you buy 50 lakh term insurance

When buying a term insurance plan in India, one of the most crucial aspects you need to take care of is selecting the right coverage amount to meet the expected financial obligations of your loved ones in your absence. This is where a value-for-money, high-coverage plan like the 50 lakh term insurance policy stands out as a suitable option. This article covers some of the most essential information related to the popular 50 lakh term insurance plan choice. 

What is a 50 lakh term insurance plan?

As the name would suggest, the 50 lakh term insurance refers to a term insurance plan that features a sum assured of INR 50 lakhs. In other words, it is a term insurance plan that provides a death benefit of INR 50 lakhs, payable to the nominees of the policyholder in the event of their unfortunate demise during the policy tenure. This payout is only offered as a death benefit, meaning if they outlive the policy without having the Return of Premium (TROP), they will not receive any maturity benefit. Having such a high coverage amount, i.e., INR 50 lakhs, ensures financial security for your loved ones in the event of your tragic passing. 

What are the benefits of purchasing a 50 lakh term insurance plan?

Buying a 50 lakh term insurance plan comes with tons of perks, with some of the key ones being;

1. Financial security for the family: The most essential benefit of investing in a term plan with a huge cover, like the 50 lakh term insurance plan, is that it ensures financial security for your family. This payout will help your loved ones handle their financial needs and maintain their existing lifestyle for a long time.
2. Huge cover at affordable cost: The massive cover amount under this plan, which is INR 50 lakhs, should be plenty for handling a variety of expenses. The best part is that you can get such a term plan with high life cover at affordable premiums, especially if you invest in it as early as possible.
3. Protection against debts and liabilities: Throughout your adult life, it is quite common to stack up a few debts and liabilities along the way. However, in the event of your untimely demise, such financial strain can be a major hindrance in the lives of your loved ones. The 50 lakh term insurance plan helps avoid such situations, enabling your family to deal with remaining debts and liabilities on your behalf with ease.
4. Enhanced protection: The 50 lakh term insurance plan can be bought alongside additional riders on top of the base plan. This way, you can customise the protection and get more tailored coverage per your needs.
5. Tax benefits: One of the most essential benefits of investing in a 50 lakh term insurance plan is the applicable tax benefits you can avail of. The premium paid against the policy is valid as tax deductibles for up to INR 1.5 lakhs under Section 80C of the Income Tax Act, 1961. Additionally, the death benefit gained by the recipient is completely tax-free under Section 10(10D) of the same Act.

Things to consider before purchasing a 50 lakh term insurance plan

Before you jump straight into buying a 50 lakh term insurance plan, make sure to spend sufficient time on research. Here are some things you should consider prior to buying such a high-cover term insurance plan;

1. Plan premium: One of the main things to notice when looking for a 50 lakh term insurance plan is the premium rate of the policy you like. Make sure to compare the cost across different platforms and insurers to find the best cover for the buck.
2. Customisability: The options for customisability let you make adjustments to the plan to get a more tailored protection for the money you are willing to spend. You can not only include riders or add-ons on top of the base plan but also make changes to aspects like policy term, premium paying term, premium paying frequency, etc.
3. Claim process: When purchasing a 50 lakh term insurance plan, make sure to understand the claim process as it is going to be a crucial factor. The more user-friendly and fast the procedure, the better the claim experience you can expect.
4. CSR value: Claim Settlement Ratio or CSR is a major factor that indicates how reliable the insurer is when it comes to claim settlement. The higher the CSR of an insurer, the more likely the claims to be approved against any policy.
5. Term plan calculator: Before purchasing a high-cover term insurance, it is better to use an online free tool called the term plan calculator, which will show you the estimated premium that you need to pay for the 50 lakh term insurance plan. The term plan calculator requires a few critical details, such as preferred plan type and sum assured, your age, name, smoking habits, occupation, etc., which it uses to calculate the premium in seconds.

Conclusion

This concludes everything you need to know about buying a 50 lakh term insurance plan. With a huge sum assured amount of INR 50 lakhs, it is quite future-proof, and can easily financially secure your loved ones in case of your untimely death within the policy period.