It might be a better idea to buy a term insurance policy instead of traditional policies like endowment plans as the former could offer a higher sum assured at affordable premiums.
You’ll also be well-advised to compare different term insurance products before selecting the one that best meets your requirements.
Getting adequate life insurance protection is extremely necessary to safeguard the financial interests of your dependents in your absence. While doing so, it might be a better idea to buy a term insurance policy instead of traditional policies like endowment plans as the former could offer a higher sum assured at affordable premiums, especially if you start the policy at a young age.
This could also free up more money that could be invested in multiple instruments that are aligned with your risk appetite and liquidity requirements to generate the desired returns to meet your critical financial goals in time However, how do you determine the ideal coverage level for your family’s future financial requirements? Well, a popular rule of thumb states that the ideal sum assured should be 10 times to 20 times your current annual income.
However, the more accurate way would be to do so factoring in your current finances, financial goals and inflation. Meaning, you may calculate your ideal coverage level by multiplying your current annual expenses with the number of years left till retirement combined with the current value of your life goals and your total loans and liabilities minus your existing savings and investments, according to BankBazaar.
Do note, the maximum coverage level applicable to you would be based on your current income; so, you might not be allowed to buy a policy whose sum assured is more than 30 times your current annual income in some cases. You’ll also be well-advised to compare different term insurance products before selecting the one that best meets your requirements. While doing so, factor in the policy benefits and features and the insurer’s claim settlement ratio apart from the premium amount, as per BankBazaar.
To help you with this, we have prepared a list of 20 term insurance policies along with their indicative annual EMIs for a sum assured of Rs 2 crore with a tenure of 30 years. All the premiums have been calculated for a 30-year-old salaried unmarried non-smoker male residing in Bangalore earning Rs 10 lakh annually.
Do note, the premium applicable to you could be different depending on your age, income, gender, policy features, or any other terms and conditions laid out by your chosen insurer.
What Does a Term Plan with a Sum Assured of Rs 2 Crore Cost?
Disclaimer: Data pertains to term insurance cover of Rs 2 crore for a 30-year-old, salaried, non-smoker male (unmarried), residing in Bangalore, earning Rs 10 lakh annually, for a 30-year term. The table is not exhaustive as it excludes companies for which data is not available on their website. Data as on 9 March, 2021. *The companies have been listed on the basis of their death claim settlement ratios as per IRDA Annual Report FY2019-20 in descending order. Data compiled by BankBazaar.com.