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A ₹25 lakh term insurance plan is a smart way to guard your family’s financial future. By paying regular premiums, you ensure that your loved ones have a solid financial cushion in your absence. It is a practical and affordable way to support their goals and dreams, even when life takes unexpected turns.
A ₹25 lakh term insurance is basically a term insurance for family with a coverage of ₹25 lakh that protects you and your family for a set duration if you (the insured person) pass away during the plan’s active period. In such cases, the designated beneficiary receives a payout of ₹25 lakh. This amount can help your loved ones manage daily expenses without needing to use money from their savings.
Life is uncertain, and having financial protection in place can give you lasting peace of mind. Choosing a life insurance policy like a ₹25 lakh term insurance plan ensures your family stays financially secure in your absence. It offers affordable premiums, which makes it an ideal choice for those looking to secure their loved ones without straining their budget. Such a policy can help clear outstanding loans or liabilities, ensuring your family does not carry any financial burden.
Moreover, it provides the reassurance that your family’s daily expenses and future aspirations will be well taken care of. While ₹25 lakh can serve as a basic safety net, those seeking greater coverage might consider options like ₹50 lakh term insurance, ₹1 crore term insurance, or even ₹5 crore term insurance, depending on their income and future obligations.
To understand how a ₹25 lakh term insurance plan works, let’s consider an example:
Raj, a 28-year-old IT professional, opts for a policy with a 25-year term and pays regular premiums. He chooses the coverage based on his income, dependents, and long-term goals. If Raj passes away during the policy tenure, his family will receive the ₹25 lakh sum assured. This payout can help them manage home loan EMIs, household expenses, and even his children’s education fees.
Such a plan plays a significant role in financial planning by offering peace of mind and protection against life’s uncertainties. If Raj survives the policy term, there is typically no payout, as term plans are designed primarily for risk coverage.
Before you move forward and learn how to choose a plan, you must know the term insurance benefits and features. This will help you understand your needs better and how a term insurance plan can fulfill those requirements:
| Feature/Benefit |
Description |
| Death Benefits |
Ensures a payout of ₹25 lakh to your family if you pass away during the policy term, providing financial stability in your absence |
| Maturity Benefits |
Some term plans offer a return of premiums paid if you outlive the policy term, letting you recover part of your investment |
| Tax Benefits |
Avail term insurance tax benefits with deductions under Section 80C for premiums paid and Section 10(10D) for claim payouts |
| Rider Benefits |
Enhance your coverage with additional protection options: ● Accidental Death Benefit - Additional payout if death occurs due to an accident ● Critical Illness Benefit - Lump sum payout if diagnosed with a covered critical illness ● Waiver of Premium - Future premiums are waived off in case of disability or critical illness, keeping the policy active |
| Coverage Against Various Liabilities |
Helps cover outstanding debts, loans, and other financial liabilities, preventing your family from bearing the burden |
| Claim Assistance |
Insurers provide dedicated claim support to simplify the process and help your family access the benefits without hassle |
| Low Premiums |
Term insurance plans offer high coverage for affordable premiums, making them budget-friendly and accessible |
| Buying Process |
The policy can be bought online or offline, with easy steps to compare, apply, and complete the process, saving time and effort |
| Premium Payment Frequency |
Choose a payment frequency—monthly, quarterly, semi-annually, or annually—that aligns with your budget, giving you greater control over finances |
| Payout Options of Term Plan |
Select from different payout options, like lump sum or monthly installments, allowing your family to receive benefits as per their needs |
| Financial Protection |
A ₹25 lakh term plan offers security to ensure your family’s financial needs are met, even in your absence, safeguarding their future |
One of the significant advantages of term insurance plans is their tax benefits. Here’s how you can save:
These tax benefits not only reduce your annual tax liability but also make term insurance an attractive financial planning tool.
Choosing the right term insurance is a critical task for anyone. You must be aware of your financial needs, budget, and many other factors affecting it. Before making the final decision, you must go through the following factors impacting your term plan insurance:
Premium is one of the most important aspects of any term insurance plan. It is the amount of money that you pay to the insurance company to avail of the benefits provided under the plan you chose. This amount should be evaluated properly so that it covers all your expenses when the crisis arrives. You should also continue paying your premiums on time to avail of the benefits. Therefore, choose a premium that fits your budget and matches your needs.
When choosing an insurance provider, consider their Claim Settlement Ratio (CSR). The CSR reflects the percentage of claims the company approves each year. A higher CSR generally indicates a smoother claim process and a greater likelihood of your claim being settled efficiently.
Additional riders or add-ons are extra features that you can opt for along with your regular insurance plan. These are complementary benefits that enhance the usability of your term plan. Accidental cover, critical illness rider, or permanent disability riders can add to the already existing benefits of your term plan.
The premium paying term is when you must pay premiums for your policy. This term can either match or be shorter than your policy’s overall duration. For example, you might opt for a term insurance plan offering life coverage for 40 years. The following are some of the popular premium payment options for a term insurance plan ₹25 lakhs:
With this option, you pay premiums for the entire policy duration until it matures or until the end of the policy term. Premiums are paid on a regular basis, such as monthly, quarterly, semi-annually, or annually, depending on the policy terms.
With this option, you pay higher premiums for your policy but for a shorter period while keeping coverage for the full term.
It involves making a one-time lump sum payment for the entire policy coverage at the beginning of the policy term. Once you make this single premium payment, you are not required to make any further payments toward the policy.
A term insurance ₹25 lakh plan ensures that your beneficiaries receive a significant payout, offering the support they need to maintain their lifestyle and meet future expenses. By understanding the benefits, features, and premium options of term insurance, you can make informed choices that strengthen your family’s financial safety net. Always assess your personal needs, compare policies, and choose one that fits both your goals and your budget. If your financial responsibilities are higher, you can explore other options like ₹2 crore term insurance for enhanced protection. The goal is to select a plan that allows your family to continue their lives without financial compromise.
1
You can buy a term insurance of ₹25 lakh by comparing policies online, choosing the one that fits your needs, and completing the application with the necessary documents and a medical check-up if required.
2
Yes, most insurers allow NRIs to buy term insurance plans, provided they meet the eligibility criteria. Some insurers might require documentation like proof of income, residency status, and medical records.
3
The maximum maturity age for a ₹25 lakh term plan varies among insurers, typically ranging from 75 to 85 years.
4
Yes, if you work in a high-risk occupation like mining, aviation, or construction, your premiums might be higher due to the increased risk of fatal incidents.
5
Insurers may increase premiums or exclude coverage for specific conditions depending on the severity of your medical history.
6
Yes, the Kotak Standard Plan typically offers a grace period for premium payments.
7
A ₹25 lakh term plan provides financial protection to your beneficiaries in case of your demise.
8
The premium amount for a ₹25 lakh term plan depends on various factors like age, health, and chosen coverage.
9
Missing premium payments could result in policy lapse or require reinstatement with potential penalties.
10
The claim settlement process involves notifying the insurer, submitting required documents, and undergoing evaluation.
11
Many insurers offer options to add spouses or children to a ₹25 lakh term life plan for enhanced coverage.
12
Coverage usually begins shortly after purchasing a ₹25 lakh term plan once all formalities are completed.
13
The usage of death benefits from a term insurance for ₹25 lakh is typically unrestricted, allowing beneficiaries to utilize it as needed.
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
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