In today’s world, parenting is not a cakewalk because it is no longer limited to raising the child. Nowadays, ensuring a child’s well-being involves more than providing love and care. Financially protecting children’s futures is also integral to parenthood and child care. If you are a single parent worried about your child’s financial security, life insurance policies, especially a 1 crore life insurance plan, can be your saviour. This article will delve into different aspects of one crore life insurance for parents.
What is a 1 Crore Term Insurance Plan?
A one-crore-term insurance policy can be defined as a life insurance product that provides a death benefit of one crore rupee to the nominee or designated beneficiary of the insured in case of the insured’s death during the insurance-covered term. Unlike traditional life insurance policies involving cash accumulation, a term insurance plan focuses on the death benefit. Hence, the premiums remain lower and affordable for many parents.
Why a ₹1 Crore Life Cover is a Smart Choice for Your Child’s Future
Opting for a ₹1 crore life cover for your child is a wise step for various reasons. Some of the key advantages include:
1. High Coverage at Affordable Premiums: Securing a ₹1 crore life cover offers significant financial protection for your child with premiums that are especially affordable when you start early. You can use a life insurance calculator to estimate these premiums.
2. Securing Your Child’s Future: It guarantees your child won’t face financial difficulties, maintain their lifestyle, and help them achieve their dreams if you, as a parent, are no longer there.
3. Covers Financial Liabilities: It can manage and settle outstanding debts, such as home or personal loans, ensuring your family isn’t burdened.
4. Education Planning: Ensures your child’s educational aspirations are supported, allowing them to afford higher education without financial worries.
5. Peace of Mind: Knowing that your family will not face financial instability in your absence provides immense peace of mind. The death benefit ensures that their economic status remains stable.
6. Tax Benefits: Premiums paid for a term insurance policy allow you to take tax benefits under Section 80C of the Income Tax Act 1961 for a maximum amount of ₹1.5 lakhs. The death benefit also received by the nominee is tax-exempt.
7. Flexibility to Add Riders: Term insurance plans offer the flexibility to add riders. You can add riders as needed, such as critical illness riders, accidental death riders, and disability riders, to the base plan.
Types of Term Insurance Plans for Parents
Parents can choose various term insurance plans depending on their financial objectives, liabilities, and future security requirements. Some of the common types include:
Level Term Insurance
A level-term insurance policy offers a guaranteed sum. The constant premium provides predictable costs for parents and financial security for their children. This policy is suitable for stable and simple coverage parents.
Increasing Term Insurance
In an increasing term insurance policy, the sum assured increases with time to match inflation and increasing financial requirements. Parents may choose this to provide proper financial assistance for their children as educational costs and living expenses go up.
Decreasing Term Insurance
This plan is designed to cover outstanding loans, where the sum assured decreases over time as the loan is repaid. Parents with housing or study loans can opt for this so that their family is not left with unpaid dues in the event of their demise. The premiums are generally less than level-term policies.
Return of Premium Term Insurance
Unlike regular term plans, a return of premium term insurance returns all premiums paid in case the policyholder outlives the term. Parents looking for protection and a maturity benefit can opt for this, albeit at a costlier premium than regular term insurance.
A ₹1 crore life insurance policy is vital for parents to ensure their children are financially secure. This ensures that the child’s needs will be addressed if anything untoward happens to the parent. Besides financial security, it provides peace of mind and tax benefits, helping them save money efficiently.
