A 50 Lakh Term Plan entitles the beneficiaries to receive an amount of INR 50 lakhs in case the policyholder dies. This amount will help the family members of the insured in his absence to meet routine expenses, maintain their lifestyle, pay off liabilities, etc. This plan offers affordable & substantial coverage to policyholders’ family members, hence offering financial security.
Let us now understand some terms related to INR 50 LakhTerm Insurance:
- Sum Assured
It means the coverage amount of INR 50 lakhs that the family members would be entitled to receive in case of the policyholder’s sudden demise.
- Premium Payments
The policyholder is required to determine the premium amount, frequency of payment, & the desired policy tenure.
- Policy Tenure
The policy has a term during which the policy remains active.
- Maturity Benefit
In case the insured survives the policy tenure, all the premium amount that is returned in case of a term plan with return of premium is called maturity benefit.
- Death Benefit
This is the amount of INR 50 lakhs that will be received by the family members of the insured in case of sudden demise of the insured.
- Rider Benefit
Additional riders can be added to the plan to enhance its current features, like critical illness riders, disability riders, accidental death benefit riders, etc.
Let us now understand the concept using an example:
Mr. Arun is a sole-earning man in a family of 4 people, i.e. a wife & two kids. He bought a term plan with a coverage amount of INR 50 lakhs & a policy tenure of 20 years.
Situation I: Mr. Arun dies during the policy tenure
If he dies within 20 years, his wife, i.e. the nominee will receive the sum assured of INR 50 lakhs. This amount will help her meet expenses, pay off debt obligations, etc.
Situation II: Mr. Arun outlives the policy tenure
If he survives the policy tenure, no maturity benefit will be received.
Who Needs a 50 Lakhs Term Plan?
Whether you are a sole earner or small business owner, choosing the Best Term Plan is important to earn advantages at a competitive price & secure the financial future. Let us look at the list of individuals who should plan to buy a term plan:
- Young earners
Youngsters should consider getting term insurance of INR 50 lakhs, as it will provide safety & guarantee the family’s financial security when they are not present.
- Individuals with Dependent Parents
In case parents do not have a pension & are dependent on a single earning child, a term plan is a must. It provides financial security for the parents of individuals in case of their sudden demise.
- Married Couples& Young Parents
Newlyweds & couples entering into parenthood should also opt for Term insurance as liabilities also increase. Acting as a financial support system, it safeguards the future of the parents & children.
- Individuals with Home Loans
Individuals with home loans can also consider term insurance, which will not overburden the family if the insured dies.
- Small Business Owners
Most of the business expenses are incurred on credit, leading you into debt, hence a term loan of INR 50 lakhs will take care of all your debts. Entrepreneurs can use term insurance strategically to ensure their business continues & further support their family financially in the event of sudden demise.
- Senior Investors
In the event of an investor’s sudden demise, the regular amount invested for wealth generation would be paused. Term insurance would prevent this by securing the future of the family members of the investor. This plan is mainly for those elderly whose major responsibilities are over, providing their spouses with financial protection in case of any unforeseen event.
- Individuals with Educational Loans
Individuals with home loans can also consider term insurance, which will not overburden the family if the insured dies.A term loan will settle the remaining amount of the loan, removing the financial burden from the family members.
Eligibility Criteria for a 50 Lakhs Term Plan
Provided are the eligibility parameters that should be met if opting for a 50 Lakhs term plan:
- The minimum age of insured can be 18 years.
- The maximum age of an insured can be 65 years.
- The minimum income required will be on the higher side, which may vary in case of larger coverage.
- An individual should be an Indian resident.
- The categories of individuals who can apply include salaried individuals, housewives, professionals, self-employed individuals, etc.
- An individual is required to undergo medical tests to analyse health-related risks, if any, which might affect the premium amount & the sum assured amount.
Benefits of INR 50 Lakhs Term Plan
Provided are the benefits of buying a 50 lakhs term plan:
- High Coverage at Affordable Premiums
This plan offers high coverage at an affordable premium in comparison to other term plans.
- Financial Security for Family
This plan helps to provide financial security, maintain a lifestyle, pay off loans & debt obligations, & meet routine expenses, etc. in the absence of the policyholder.
- Tax Benefits
The premium amount paid is eligible to receive a deduction of tax u/s 80C & the death benefit received is exempt from tax u/s 10(10D).
- Flexibility
This plan offers flexibility in payment of the premium amount, i.e. monthly, quarterly, semi-annually, or annually.
- Riders & Add Ons
It offers additional riders to enhance the features of the term plan, like critical riders, waiver of premium, accidental death benefits, etc.
- Mental peace
Knowing that the family members will be financially secure in your absence provides mental peace.
- Transparency
These plans are simple to understand, with easy terms & conditions.
- Loan Security
It secures all your outstanding debts & liabilities, leaving your family members financially secure in your absence.
Conclusion
An INR 50 lakhs term insurance plan is considered to be an affordable & provides substantial coverage, hence securing the family’s financial future. Knowing that your family will be financially protected in your absence offers mental peace & helps meeting future financial goals.
