Term insurance policies have steadily become one of the most popular financial products available to safeguard the future financial interests of a family. Much of this popularity can be attributed to its affordability, flexibility (via riders), and easy access to a substantial amount that can act as your financial replacement in the event of your unfortunate absence.
Now, considering that a term insurance cover has to be calculated based on your income profile, number of dependents involved, years left till retirement, existing financial liabilities, and more, it is obvious that in the case of term cover, “one size does not fit all.” You can always calculate your ideal term insurance coverage using free tools, and in case your ideal coverage comes to ₹2 crores, this blog will prove to be the best guide - you will know how to calculate your ideal term insurance cover, which are the best term insurance plans offering such coverage, and if you actually need a ₹2 crore term insurance plan.
So, let’s start!
Best Term Insurance Plans With 2 Crore Coverage
| Best Term Insurance Plans | Premiums | Features | Drawbacks |
|---|---|---|---|
| HDFC Click 2 Protect Super | ₹28,632 |
|
Expensive as compared to other plans in its category |
| ICICI iProtect Smart | ₹20,277 |
|
Insurer could do a better job at improving its overall operational efficiency |
| Max Life Smart Secure Plus | ₹21,509 |
|
NONE |
| TATA AIA Sampoorna Raksha Supreme | ₹22,826 |
|
None |
| Bajaj Allianz Life eTouch | ₹15,482 |
|
No Critical Illness Benefit |
(The case in point is a 30-year-old, non-smoking male individual who has opted for a ₹2 crore term insurance plan. The policy will cover him till he turns 65 years old.)
Do you need a 2 Crore Term Insurance Plan?
While we discuss the best ₹2 crore term insurance policies available in the market, what you need to first analyse is whether you at all need the ₹2 crore coverage. What is your ideal coverage, and how can you determine the amount?
Availing a term insurance policy is a great and smart financial move – remember you are looking at a future when the inflation will be higher than what it is now. Additionally, your dependents will need financial assistance, and your family has some definite future life-stage goals that require solid financial support. In order to ensure that, your consistent source of income is a necessity. However, what if, due to some unfortunate situation, your presence becomes impossible?
This is where a term insurance policy comes into play. The term cover acts as your financial replacement in the event of your passing away to ensure that your family’s future financial goals are shielded despite your absence. All that you need to do is ensure that you have chosen the ideal term cover for your family. In this case, there are a few factors that you need to consider -
- Number and age of dependents - Term insurance cover amount is intended for the financial safekeeping of your dependents. Thus, you need to take into account the current age of your dependents and then analyse the years remaining for them to become financially independent. Thus, the younger your dependents, the higher your cover amount.
- Monthly/Yearly expenses - In the case of your unfortunate absence, you will have to consider the household expenses that your family will bear without the support of your steady source of income. The cover amount (whether it’s disbursed as a lump sum or in staggered instalments) will need to cover these monthly/annual household expenses, too.
- Existing financial liabilities - Whether it’s a home loan, business loan, education loan, or any other financial liabilities, during your absence, you will need to arrange for these EMIs to be paid off. Thus, while computing the ideal term insurance cover for yourself, make sure to include such existing financial liabilities, too.
- Policy tenure - When you purchase a term insurance policy, you have to select the policy tenure or the age till which you are covered under the policy. While insurers will offer you plans that cover you till you turn 99, whether they are a good financial move or not – is a different discussion.
Think of this: term insurance policies are meant to act as your income replacement in your absence. Considering this, it only makes sense that you are covered till your retirement years, i.e., 60 or 70 years. Moreover, since the average life expectancy considerably drops after you turn 70-75, the chances of payout increase. Subsequently, life insurance providers try to minimise the risk by boosting the premiums considerably. So, your ideal policy tenure will substantially impact your term cover and premiums.
5. Inflation – When calculating your term insurance coverage, make sure to consider the shooting inflation, which would absolutely raise the living costs and monthly/yearly expenses for your family.
Once you have considered these factors, use the free term insurance cover calculator and then decide if you at all need a ₹2 crore term insurance policy coverage.
Now, let’s say that your ideal coverage is ₹2 crore; in that case, here is a list of the best term insurance plans that offer such coverage.
What are the Best Policies Offering 2 Crore Term Insurance?
- HDFC Click 2 Protect Super
Click 2 Protect Super is one of the most comprehensive term insurance plans from the stable of HDFC and is specifically popular considering the scope of customisation it offers. Such features of the plan, accompanied by the credibility and reputation of the insurer, make it one of the best choices as a ₹2 crore term insurance policy. Among its list of riders are -
- Zero Cost Option: This is one of the most marketed perks of a lot of the top-term insurance policies available in the market. As per insurers, if you opt for this rider and forego the policy at a pre-specified date/policy year, the provider will return all your premiums paid up to date after deducting the GST and the rider premiums. Under this policy, this is available as an in-built feature.
- Accidental Death Benefit: Under this rider, if a policyholder passes away due to an accident, the insurer disburses an additional amount over and above the base sum assured.
- Critical Illness Benefit: HDFC Click 2 Protect Super has a list of 60 or 19 critical ailments (2 variants) in its policy wording. As a policyholder, if you are diagnosed with any of these critical illnesses, the insurance provider offers you an additional amount that can be used at your discretion to treat the disease, use it for savings/investments, etc.
- Waiver of Premium: If you are left permanently disabled following an accident/a critical ailment or are diagnosed with any of the listed critical illnesses, you will be left financially compromised due to issues in your employment/source of income. Under such circumstances, keeping a term insurance plan active by paying premiums regularly is a definite financial burden. However, if you opt for the Waiver of Premium Rider, your term insurance cover will stay active without paying any future premiums.
- Total Permanent Disability: Say in case you are left permanently disabled following a critical ailment or an accident. This suggests that your source of income is severely compromised. If you have opted for the HDFC income benefit rider, the insurer offers you an amount that ensures a replacement of your monthly/annual income to continue with the household expenses.
- Inflation Protection: In general, an insurer doesn’t allow many changes to the term insurance cover initially chosen. However, if you have missed factoring in inflation while calculating your ideal term insurance cover, this rider might be of great help. This rider will help you boost the cover amount of your term plan as per the inflation rate.
Drawback: This is an expensive policy as compared to the other plans in its category. This is unfortunately true for all term insurance plans launched from the HDFC stable.
2. ICICI iProtect Smart
iProtect Smart from the stable of ICICI has -
- 4 variants in terms of its payouts - Lump sum, Income, Lump sum plus Income, and Increasing Income.
- And there are 4 variants - Life, Life Plus, Life & Health, and All-in-One. These variants are all comprehensive, affordable, and feature-rich. Each has a specific set of riders that make them niche products.
| Variants | Waiver of Premium + Terminal Illness Benefit | Waiver of Premium (Disability) | Accidental Death Benefit | Critical Illness Benefit |
|---|---|---|---|---|
| Life | ✔️ | ✔️ | ❌ | ❌ |
| Life Plus | ✔️ | ✔️ | ❌ | ❌ |
| Life & Health | ✔️ | ✔️ | ❌ | ✔️ |
| All-in-One | ✔️ | ✔️ | ✔️ | ✔️ |
The most important features offered by the ICICI iProtect Smart policy include -
- Life Stage Benefit: This is an in-built perk of the policy that boosts the initial cover amount by a pre-decided amount during major life events (marriage, childbirth/adoption, etc.) of the policyholder. Considering that term insurance policies lack the flexibility to change the base cover amount once the policy is purchased, this feature is a great perk that will help you with a higher cover amount when you actually require it.
- Smart Exit Benefit: This is an in-built feature of the ICICI iProtect Smart plan, under which if you cancel the policy mid-term, you will receive a full refund of the premiums paid to date (excluding GST and rider premiums). However, this feature has quite a few clauses that you need to be aware of before you bank into the perks.
- Accelerated Critical Illness Benefit: The ICICI iProtect Smart policy has a list of 34 critical illnesses. In case you are diagnosed with any of these ailments, the insurer offers you a lump sum amount that can be used to cater to any purpose of your choice. However, this amount is deducted from the base amount. So, eventually, when the policyholder passes away, the beneficiaries receive a reduced payout.
- Accidental Death Benefit: In case the policyholder passes away following an accident, the insurer offers an additional amount that is over and above the base sum assured. This can be a great rider for individuals with a profession that requires frequent travel plans.
- Waiver of Premium: If the policyholder is left permanently and totally disabled due to an accident, the policyholder’s source of income becomes severely compromised. Under such circumstances, this rider offers you the perk to avoid paying any more premiums and keep your term insurance policy active.
- Terminal Illness Benefit: In case the policyholder is diagnosed with a terminal ailment, and the doctor (one from your personal preference and the other from the insurer’s team) offers a written declaration that you only have a few months to live, the insurer will offer you an amount (as a lump sum or in monthly instalments), to use at your discretion.
Drawback: The plan is truly one of the best. However, when it comes to the insurer, ICICI Prudential can do a much better job at improving its overall operational efficiency and customer support.
3. Max Life Smart Secure Plus
The Smart Secure Plus policy from Max Life is one of the best ₹2 crore term insurance plans available in the market. The plan has it all - it’s comprehensive, affordable, offers maximum customisation via multiple riders and is one of the best term insurance providers in the market. Let’s take a quick look at the incredible features offered via this policy -
- Critical Illness Benefit: The insurer lists a total of 22/40/64 critical ailments (3 variants). In case the policyholder is diagnosed with either of these illnesses, the insurer offers you a certain amount. This amount can be used as per your requirement to treat the ailment, use it for funds, etc. The variant covering 40 ailments deducts this amount from the base cover, and in the case of the other 2 variants, the sum offered is over and above the cover amount.
- Accident Cover: If the death of the policyholder is caused by an accident, the insurer offers you an additional amount that is over and above the base amount.
- Return of Premium: Under this rider, if you survive the policy tenure, the insurer will reimburse the entire premium paid (minus the GST and rider premium).
- Voluntary Top-Up Sum Assured: Usually, term insurance providers are extremely stringent about bringing any changes to the base cover amount. However, in the case of Max Life Smart Secure Plus, the insurer offers you the perk of boosting your sum assured by up to a maximum of 100% if you require it (only after you have completed at least 1 year in the policy and after medical and financial underwriting is conducted).
- Terminal Illness: In case you are diagnosed with a terminal ailment and have a few months to live, the insurer offers you the cover amount. This can be used at your discretion, as per your requirement.
- Waiver of Premium Plus: If you are diagnosed with any of the listed critical ailments or are left permanently and totally disabled, the rider offers you the perk of continuing with the plan without paying any future premiums. This will be of huge help considering the compromised state of your finances in the backdrop of your deteriorating health condition.
- Inflation Shield: The base sum assured grows as per the year-on-year inflation under this rider. This rider helps if you are finding it difficult to calculate the ideal cover by taking into account the future inflation factor.
Drawback: There are no such drawbacks in the plan, and it is hence a popular recommendation as a ₹2 crore term insurance plan.
4. TATA AIA Sampoorna Raksha Supreme
Quite possibly, one of the most affordable policies in the market, the TATA AIA Sampoorna Raksha Supreme, is comprehensive and offers some great scope for customisation. Here is a look at some of the best features of this policy –
- CritiCare Plus Benefit: The policy has a list of 40 critical ailments. If you are diagnosed with either of these, the insurer pays you an additional amount that is over and above the base sum assured.
- Top-Up Sum Assured: Every year, during the policy anniversary, the base sum assured is boosted by 5%.
- Life Stage Benefit: In the case of marriage, childbirth/child adoption, or home loans, the insurer offers you a chance to boost your base sum assured by a certain pre-decided amount.
- Terminal Illness Benefit: In the case you are diagnosed with a terminal ailment, the insurer offers a lump sum disbursal that can amount to up to 50% of the cover amount. This in-built perk is also called the Payor Accelerator Benefit.
- Whole Life Cover: Though not usually a recommended option, the plan offers you the chance to get yourself covered ill you are 100 years old.
- Return of Premium: If you survive the policy tenure, the insurer offers to reimburse the entire premium paid (minus the GST).
Additionally, the policy offers lower premiums for women policyholders.
Drawback: None.
This is quite a popular term insurance plan from the stable of Bajaj Allianz Life. The plan is affordable and comes in 3 variants - Life Shield, Life Shield Plus, and Life Shield Return of Premium, across which there are various combinations of riders -
- Terminal illness
- Waiver of Premium
- Accidental Death Benefit Rider
- Return of Premiums
- Premium Holiday (under this rider, the policyholder can skip 1/2/3 years of premiums during financial constraints)
Drawback: The plan lacks the Critical Illness Benefit Rider, Inflation Shield, and more.
Conclusion
In the recent backdrop of inflation, ₹2 crores really isn’t too extravagant an amount to financially safeguard the future of your family. This amount will inevitably handle all the major life stage events of your entire family - education, marriage, childbirth, home purchase, and more. However, it’s always best to calculate the ideal cover amount based on your income slab and the financial goals and requirements of your family. Subsequently, you can opt for either of the aforementioned ₹2 crore term insurance plans. Additionally, a majority of these plans still stand as the best possible option if your required cover amount is higher than ₹2 crores.
