5 Crore Term Insurance Plans: Are They Worth It?

A ₹5 crore term insurance plan is designed to offer substantial life cover to individuals who have significant financial responsibilities. In exchange for regular premiums, the insurer promises a death benefit of ₹5 crore to your family if you pass away during the policy term. 

With rising living costs, inflation, and lifestyle upgrades, ₹1-2 crore may no longer be sufficient for high-income earners. ₹5 crore provides a future-proof safety net, especially for families with home loans, children's education, or elderly dependents.

However, it’s essential to understand that there is no one-size-fits-all approach to term insurance. The ideal sum assured varies from person to person, depending on factors such as income, liabilities, lifestyle, and long-term goals. For some, ₹5 crore may be more than enough; for others, it may fall short. The key is to assess your unique financial situation before deciding on the coverage amount. So, who should consider opting for a ₹5 crore term insurance plan? Let’s explore the kind of individuals and situations where this level of coverage makes sense. 

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5 Crore Term Insurance: Overview

Who Should Opt for a ₹5 Crore Term Plan?

A ₹5 cr term insurance plan is ideal for individuals with significant financial responsibilities or long-term wealth protection goals. Here’s a closer look at who might benefit the most from such a high-cover policy:

1) Earning over ₹20 lakh per annum

If your annual income exceeds ₹20 lakh, your lifestyle, liabilities, and family’s future financial needs are likely substantial. A ₹5 crore cover ensures your loved ones can maintain their standard of living even in your absence. We’ve also attached an income multiplier table under the eligibility and documents required section for further clarity as an example. However, please note that the income multiplier varies from insurer to insurer, depending on the policyholder's education and profile. 

2) A business owner, NRI, or professional with dependents

Entrepreneurs, NRIs, and professionals often have fluctuating incomes and multiple financial dependents. A high-value policy offers stability and safeguards dependents from financial uncertainty, regardless of income volatility or location.

3) Someone with home loans, dependent parents, or children’s future costs

Significant financial commitments such as large home loans, elderly parents, and children's education or marriage plans require a robust safety net. A ₹5 crore cover can take care of these expenses without burdening your family.

4) A high-net-worth individual wanting to protect wealth and avoid forced liquidation of assets

If you have considerable assets, term insurance helps ensure that your family won’t need to sell investments, property, or business holdings in a hurry to manage expenses or settle debts.

In summary, a ₹5cr term insurance plan is suitable for individuals with substantial income, significant responsibilities, or substantial assets who seek comprehensive financial protection for their loved ones.

Benefits of a 5 Crore Term Plan

Opting for a ₹5 crore life insurance policy offers more than just peace of mind—it provides robust financial backing tailored to the needs of high-earning individuals and families. Here are some of the key benefits:

1) Comprehensive Financial Protection for Large Liabilities

A ₹5 crore cover is especially suited for individuals managing high-value loans such as home loans for urban properties, business loans, or commercial investments. It ensures that unpaid debts won’t burden your family in your absence.

2) Home Loan Security for Urban Properties

Urban real estate often involves sizeable EMIs. A ₹5 crore term insurance plan ensures that your family can retain ownership of your home and continue living in comfort, without the stress of repaying a large home loan if you’re not around. 

3) Business Continuity

Entrepreneurs and business owners often have liabilities tied to their ventures. A ₹5 crore term policy can help ensure smooth business continuity or provide funds to cover outstanding obligations, allowing the family to retain or exit the business without financial distress.

4) Support for Families with Multiple Dependents

If you have a large family or multiple dependents, such as children, aging parents, or financially dependent siblings, a ₹5 crore cover ensures that each individual’s needs, from education to daily living expenses, are met even in your absence. 

5) Cost-Effective Coverage

Despite the large sum assured, premiums remain surprisingly affordable. A healthy 30-year-old male non-smoker can secure ₹5 crore coverage for ₹ 50,000 to ₹ 65,000 per year, making it a smart financial move.

6) Aligned with High-Income Lifestyle and Future Goals

A ₹5 crore term plan is ideal for individuals with high living standards and long-term financial commitments, such as international education plans for children, luxury home EMIs, or regular high-value expenses. It ensures that your family's lifestyle doesn't suffer significantly in your absence and that their aspirations, from global education to quality healthcare, remain intact. For professionals, NRIs, and CXOs with substantial financial responsibilities, this coverage accurately reflects the scope of their obligations.

In essence, this plan offers a strategic blend of high-value protection, affordability, and long-term financial efficiency, making it a wise choice for those with significant responsibilities.

How 5 Crore Term Insurance Works

Imagine this: you’re 30 years old, earning ₹25 lakh per annum, with a home loan and plans for your child’s education abroad. You opt for a ₹5 crore term policy. If you pass away during the term, your nominee gets the full amount, helping them stay financially secure without selling assets or facing a drop in living standards. 

However, it’s important to note that eligibility for a ₹5 crore term insurance plan isn’t automatic. Insurers typically assess your income, age, medical history, and lifestyle habits to determine whether you’re eligible for this level of coverage. So, while the benefit is substantial, obtaining approval for such high coverage involves meeting specific financial and health criteria, which we will cover in greater detail in the subsequent sections.

Key Features and Options for a 5 Crore Term Insurance

Eligibility and Documentation of 5 Crore Term Insurance

Before applying for a ₹5 crore term insurance plan, it's essential to understand the basic eligibility criteria and the documentation you'll need to submit. These ensure that insurers can accurately assess risk and offer suitable coverage.

1) Basic Eligibility

Now that we’ve seen the income multiplier used regarding each age group, let’s look at the education and work profile eligibility requirements.

• Age: 18-65 years (varies by insurer)
  Most insurers offer term plans to individuals between 18 and 65 years of age, though the exact range may differ slightly depending on the provider’s underwriting policies.
• Income: Typically ₹20+ lakh per annum
  Since this is a high coverage policy, insurers typically require proof of a stable and substantial income to justify the large sum assured, irrespective of whether you’re self-employed or salaried.
• Medical Fitness: Mandatory for high cover amounts
  To assess your health risk, a comprehensive medical examination is necessary. This helps determine your eligibility and premium rate for a ₹5 crore cover.

2) Documents Required

• Income Proof
  Salary slips, income tax returns (ITRs), or bank statements may be needed to validate your annual income and financial capacity.
• Identity and Address Proof
  Documents like Aadhaar card, PAN card, passport, or utility bills are required to verify your identity and residential address.
• Age Proof
  Any government-issued document with your date of birth (such as a PAN card, birth certificate, or passport) can serve as age proof.
• Medical Reports
  Depending on your age, health history, and insurer requirements, you may need to undergo tests such as CBC (Complete Blood Count), HbA1c (for diabetes), lipid profile (for cholesterol), TMT (Treadmill Test), chest X-ray, and abdominal ultrasound. You also need to provide past medical records.

In short, meeting the eligibility criteria and preparing the correct documents in advance ensures a smoother application process and faster policy issuance.

Best 5 Crore Term Insurance Plans in India (2025)

Let’s consider the example of a non-smoking 30-year-old salaried Male covered till the age of 65 for a 5cr plan. 

Note: The first-year premiums show a discount, but from the second year onwards, the premiums are going to be the same for the entire policy term.

Disclaimer: The data is indicative as premiums are subject to periodic revision and vary with age, medical history, smoking/tobacco consumption habits. Please verify the latest premiums for accuracy.

Choosing the right insurer for a ₹5 crore term insurance plan isn’t just about picking the lowest premium; it's about trust, reliability, and value-added features that genuinely secure your family's future. Here are the top factors to consider before making your decision, along with a comparison of some of the most reputed insurers in India.

1) Claim Settlement Ratio (CSR)

The CSR indicates the ratio of claims an insurer settles compared to the number it receives. A higher CSR reflects better claim reliability. Axis Max Life leads with a CSR of 99.5%, closely followed by HDFC Life at 99.2% and Bajaj Allianz at 99.11%. These scores reflect exceptional dependability in paying claims on time, an essential factor in times of crisis. It’s important to note that the basic benchmark for CSR is 97% and above, but the higher, the better. 

2) Solvency Ratio

This measures an insurer’s financial stability. IRDAI mandates a minimum ratio of 1.5. Bajaj Allianz Life stands out with an impressive 5.1, indicating firm financial reserves and excellent risk management. All top insurers—HDFC Life, Axis Max Life, TATA AIA, and ICICI Prudential—comfortably exceed the regulatory benchmark.

3) Complaint Volume

A lower number of complaints per 10,000 claims often reflects smoother customer service and a more efficient claims process. HDFC Life (2) and TATA AIA (3) demonstrate outstanding customer satisfaction. ICICI Prudential sees relatively more complaints at 14.3, which may be worth considering if service experience is a priority.

4) Amount Settlement Ratio

This indicates the total amount of claims paid when compared to the total amount of claims raised. Axis Max Life (96.2%) and ICICI Prudential (95.1%) top this list, showing they handle both small and large claims effectively. HDFC Life remains a strong performer with a 93.9% ratio, suggesting fair and transparent claim settlement.

5) Total Business Volume

Higher premium collections indicate larger market share and greater consumer trust. HDFC Life leads with ₹27,490 crore, followed by ICICI Prudential (₹17,198 crore) and Bajaj Allianz Life (₹10,456 crore). While Axis Max Life and TATA AIA have smaller volumes, they still maintain strong performance across other key metrics.

Note: All metrics discussed here are average figures for the years 2021-2024.

Premium Calculation and Cost Factors For 5 Crore Term Insurance

When it comes to term insurance, especially for a high cover like ₹5 crore, understanding how your premium is calculated can help you make informed choices and avoid surprises. Here are the key factors insurers consider:

1) Age & Gender

Younger applicants typically pay lower premiums, as they are considered to pose a lower risk to insurers. Additionally, women generally receive slightly lower rates than men due to statistically longer life expectancy.

2) Smoking Habits

Smokers face significantly higher premiums (70-100%) than non-smokers. This is because smoking increases the risk of health issues, making the policyholder a higher potential liability for the insurer.

3) Term Length

The longer your policy term, the higher the premium because of the higher probability of death. However, locking in a rate early for the long term can save you money over time and ensure continuous protection. Moreover, at Ditto, we recommend opting until the age of 60-70, as by that age, most people have retired, can pay off their loans, and their children have become independent. After 70, the premiums start increasing as the average life expectancy in India is 70. 

4) Health History

Pre-existing conditions, family medical history, and overall health can affect your premium. A clean medical record often results in lower rates, while chronic conditions may lead to higher premiums or exclusions.

5) Riders Added

Adding optional riders, such as critical illness, accidental disability, or waiver of premium, enhances your coverage but also increases your premium slightly, depending on the type and extent of the rider. However, it’s crucial to note that this slight spike in premiums is worth the benefits that come along with these riders.

In short, your premium is a personalized reflection of risk, and understanding these variables helps you tailor your plan wisely.

Ditto’s take on 5 Crore Term Insurance

At Ditto, we don’t believe in recommending a fixed sum assured to everyone; a ₹5 crore term insurance plan isn’t a default choice, and it won’t suit every financial profile. However, for high-income individuals (typically earning ₹20 lakhs to ₹30 lakhs or more annually) with significant liabilities, such as home loans, dependent parents, or children’s education abroad, it can be a practical and sufficient coverage option. 

Yes, the premiums are slightly higher, but still manageable. A healthy 30-year-old non-smoker can expect to pay around ₹50,000–₹65,000 annually. For many in this bracket, it’s a fair price for the level of protection offered.

That said, term insurance is highly personal. The “right” cover amount depends on your income, expenses, debts, and future obligations. You don’t want to overpay for excess coverage you don’t need, nor risk being underinsured and leaving your family vulnerable.

We recommend using a term insurance coverage calculator to determine a sum that meets your needs. Because with insurance, it’s not about picking a significant number—it’s about selecting the correct number.

Why Choose Ditto for Term Insurance?

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Conclusion

A ₹5 crore term insurance plan can be a strong financial safeguard, but only if it aligns with your actual needs. It’s a smart option for those with high incomes, significant liabilities, or long-term financial responsibilities, such as children’s education or dependent care. Remember, the goal isn’t to chase a big number—it’s to ensure your family is truly protected without overextending your budget. Assess your situation, calculate your needs, and select a coverage that suits you. When chosen wisely, a ₹5 crore term plan can offer both peace of mind and practical protection.

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