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Is ₹1 Crore Term Insurance Good Enough Cover?

You cannot put a value on your life, but you can ensure that your family will never have to endure a life of financial challenges after you.

  • Nov 30, 2021

1. One crore term insurance plan is increasingly being chosen by policy purchasers as term insurance policies gain popularity.

2. When a term insurance policy is described as having an ₹1 crore sum assured, it signifies that in the event of the policyholder’s death, the death benefit will be paid to the policyholder’s family or other designated beneficiary.

3. In essence, having an 8-figure sum set aside for emergencies can ease your mind and give your loved ones a sizable financial safety net. The inexpensive premium for term insurance of ₹1 crore makes it a popular option for policy purchasers.

When you buy term insurance, you ensure that your family gets sufficient financing if something happens to you. The way term insurance works are if you pass away unexpectedly within your policy term, your family will get a lump sum death benefit payout for all their future expenses.

Now we’re talking about something that may happen way into the future, probably 10-15 years later. But when you purchase term insurance, you have to choose the insurance coverage at the present time. So it can get a little tricky to estimate exactly how much term insurance coverage would be sufficient in the future for your family. There are many methods that one can use to calculate the required term insurance coverage.

However, there are many insurance agents, representatives and even policy buyers who directly come to a figure without due consideration. And that magic figure is ₹1 crore, which is quite popular in the insurance market. But is ₹1 crore a good enough cover? Let’s find out.

Why do you need to buy a ₹1 Cr term insurance plan?

You should take a ₹1 crore term insurance plan into consideration for several reasons. Let’s examine a few of these:

Higher Coverage at Lower Premiums

If you buy it early in life, you can get a cover for ₹1 crore at low premium rates.

Security Against Financial Liabilities

A sum secured of this size allows you to adequately support your family even when you are not there. They don’t have to worry about covering their living expenses, past-due loans, or tuition.

Frees Up Earnings for Investments

When you purchase a ₹1 crore term insurance plan, let’s say at the age of 30, you obtain long-lasting protection for a low price. As a result, you may plan your savings and investments more effectively for wealth generation and place your money in appropriate financial instruments.

Comprehensive Coverage

You can upgrade the coverage of your ₹1 crore term insurance plan by purchasing additional riders, such as critical sickness benefits, waiver of premium for term insurance of ₹1 crore benefits, accidental death benefits, etc.

₹1 Crore: Is it the magic number?

First and foremost, the amount of term insurance coverage that your family will require in the future cannot be arbitrarily chosen. ₹1 crore may seem like enough now, but you must do the necessary calculations to arrive at a figure, even if that figure ultimately comes down to ₹1 crore or thereabouts. Ideally, the assured sum should be an amount that can comfortably take care of the future goals and expenses of the dependent family. These expenses include education fees for children, rent, EMIs, wedding expenses, day-to-day expenses etc. Additionally, the standard of living you envision for your family in the future also affects how much term insurance you would need.

How To Calculate Whether ₹1 Crore Is Enough Coverage for you?

One can easily calculate how much term insurance is enough for their family in the future. Basically, the term insurance cover required should be the present value of all future goals and expenses after subtracting the accumulated wealth and assets. Let us look at this via an example. Let us assume you’re planning to purchase term insurance, and currently, your monthly expenses are ₹40,000. Annually, your expenses would then be ₹4.8 lakh. As per the expert’s recommendation, one should have a life cover of at least ₹10 times their yearly expense. So, in this case, your term insurance must be at least ₹48 lakh.

Now let’s come to the other expenses. Suppose you have an existing car and home loan with an outstanding balance of ₹55 lakh.

Additionally, you want to keep at least ₹20 lakh for your children’s education.

Finally, you want an additional ₹80 lakh as retirement corpus for your spouse.

Adding all of the above, the total comes down to approximately ₹2 crores. So this must be the total amount your family would need. But you may also have some accumulated wealth or assets, so you must subtract those from this amount. Let’s assume you have ₹20 lakh in various investments that can be readily accessed. So after reducing this amount, your total insurance requirement would be ₹1.8 crores.

Who should buy term insurance for ₹1 cr?

There is no set process for acquiring a term insurance plan with a ₹1 crore cover. However, if you belong to one of the following categories, you may want to give it some thought:

When you are still young, healthy, and unburdened in your career, it is ideal to buy a suitable term insurance plan for ₹1 crore. Working professionals between the ages of 25 and 35 can purchase a ₹1 crore term insurance plan to take advantage of a low premium for term insurance of ₹1 crore that remains constant over the course of the policy.

People who are the only source of income in their households should invest in at least one ₹1 crore term plan so that their families will be adequately protected in the event of their death. Customers can also choose whether a one-crore-term policy is the best option for them or if they require greater protection.

These plans may be suitable for those between the ages of 25 and 35 because the policy term of a ₹1 crore term insurance plan can span several years of your life.

For those with an annual salary of between 5 and 7 lakhs, these plans are excellent.

Finding a term insurance plan for ₹1 crore can also be a smart choice if you are the sole provider for a large family.

Purchasing the ₹1 crore term insurance plan as a safety net can be beneficial if you have unpaid loans for your home, automobile, or education. If a disaster occurs, the sum assured can be used to pay off a person’s loans, freeing the family from debt.

How to buy ₹1 cr term insurance?

In India, the idea of insurance is not new. It is what ensures people’s mental stability in the now and the future. With the considerable death benefit provided by the term insurance plan for ₹1 crore, various financial commitments, such as children’s education, the purchase of a new home, children’s marriage, and so forth, can be met.

1. To comprehend the operation of a ₹1 crore term insurance plan, let’s first review the fundamentals of a term plan:

2. A life insurance policy with a predetermined term is known as a term plan. You will have coverage when you buy a term plan for a predetermined period of time, or “term.”

3.In India, the idea of insurance is not new. It is what ensures people’s mental stability in the now and the future. With the considerable death benefit provided by the term insurance plan for ₹1 crore, various financial commitments, such as children’s education, the purchase of a new home, children’s marriage, and so forth, can be met.

To comprehend the operation of a ₹1 crore term insurance plan, let’s first review the fundamentals of a term plan:

1. A life insurance policy with a predetermined term is known as a term plan. You will have coverage when you buy a term plan for a predetermined period of time, or “term.”

2. Your premium remains constant during the duration of your insurance. As long as you make your premium payments on time, you are protected.

3. A term insurance policy’s death benefit is intended to provide financial security for the insured’s family in the event of the insured’s passing during the policy’s term. ₹ ₹1 Crore term insurance plan is a contract that, in the case of the insured’s demise, pays the nominee the sum assured of the specified sum. To help the policyholder’s family accomplish their financial needs and objectives, this plan serves as a guardian.


If you had purchased a policy without the necessary calculations, your family might have faced financial troubles in the future. Hence, do not use an arbitrary number like ₹1 crore for your term insurance. Carefully consider the financial requirements in the future and come up with an amount.

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- A Consumer Education Initiative series by Kotak Life

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