All of us are unique and have different aspirations - while some might want to get an education in a foreign university, some might want to start a business. Everyone has different life plans - some of us might plan to get married early and start a family, while others might want to build a career first and then get married or even remain unmarried. 

Likewise, our financial goals are different too - some might want to have backing to pay off home loans, while some might want their family to have enough for their daughter’s beautiful destination wedding. Further, many of us might only have savings and simple FDs, while some might take riskier approaches through investments and others might even want to invest in properties or gold. 

Based on all the above-mentioned things, we must spend enough time calculating the appropriate term insurance cover amount for our family - instead of relying on thumb rules or getting swayed by the 1 crore term insurance plans that are sold at very cheap rates.

Why Might A 1 Crore Term Insurance Not Be Suitable?

Term insurance is one of the most important investments you will make for your family’s financial future. It is one of the ways through which you can ensure that your family doesn’t compromise on their dreams and lifestyle in your absence. 

1 crore term plans have become quite popular these days and while they look good on paper, when you actually do the math you’ll realize that a 1 crore cover won’t be sufficient for your family. In our opinion, you should do a proper calculation and buy a policy with the right cover amount. 

To find out the appropriate term cover for your family, you’ll have to take into account four aspects - 

1. Short-term expenses
2. Long-term expenses
3. Money to settle loans/ liabilities
4. Money that you already have

Beshak TruMatch

A simple way to calculate the term insurance cover is by using the Beshak TruMatch term insurance calculator. TruMatch is a term insurance recommendation engine where, after you answer a series of questions, it will recommend the exact amount your family will need. Further, it will also suggest which features you must pick, and which you shouldn’t and show a list of plans based on all these recommendations.

Check out Beshak TruMatch here: https://www.beshak.org/insurance/term-life-insurance/trumatch/

What Should You Do If You Are Not Eligible For The Amount You Need?

Term insurance has certain eligibility requirements with respect to age, income, occupation, education, and location of residence. To be eligible to purchase a term plan, you need to meet all these criteria. 

If, for some reason, you’re not eligible to buy adequate term insurance cover for your family, here are two things you can do - 

1️⃣ Buy a policy with the Increasing Cover feature

The increasing cover feature allows you to automatically grow your sum assured at regular intervals throughout the policy term. With this feature, your cover will increase gradually at predetermined rates until it reaches a maximum limit. 

Every insurer offers different modes of increasing covers. For instance - 

• Increase of 5 % / 8 % / 10 % per year till your cover becomes 2x.
• Increase of 5 % / 10 % every year till the end of your policy term.
• Increase of 5 % every year till you reach the age of 55.

You can calculate and find out which increasing cover option will ensure that your family is covered sufficiently, and choose accordingly.

2️⃣ Opt for the Accidental Death Benefit Rider

Riders are easy to buy add-ons that provide special benefits under certain circumstances. You can opt for them at the time of purchasing your term insurance policy. The accidental death benefit rider will provide your family with an additional sum of money in case your death happens due to an accident. It is one of the ways through which you can increase your coverage if you’re not able to buy the desirable term insurance cover.

Say you calculate and find out that you need to buy INR 2 Crore cover for your family. But you are eligible to buy a cover of only INR 1.5 Crore. In such a case, you can buy the accidental death benefit rider for INR 50 Lakhs. Your family will only receive INR 1.5 Crore if you die due to any other type of death except accidents. 

However,  your family will receive the entire INR 2 Crores (term insurance claim of 1.5 Crore + rider benefit of 50 Lakhs) if your death happens because of an accident. 

Summing up, you should not get swayed by the 1 crore term insurance plans sold in the markets at low costs. It is important that you take into account your and your family’s current and future financial goals and liabilities and accordingly buy sufficient cover.

If you have any further questions related to term insurance, you can post them on the Beshak Insurance Forum and get answers from experts!

Customising a term insurance plan getting too complex, and way out of hand? There’s a simple solution for that right now. 

Check out Beshak TruMatch -  the first-ever term insurance recommendation engine that will recommend the exact cover amount for your family and other customizations you must pick so that your term plan is perfectly tailored to your family’s needs.