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07 Mar, 2023 | Term Life Insurance

Will A 2 Crore Term Insurance Plan Be Sufficient For Your Family?

Aakansha Jain
By Aakansha Jain
Research & Content Ninja at Beshak
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It is essential to ensure that your family is financially secure in case of an unfortunate event such as your untimely demise. While love, care, and support are crucial, they are not sufficient to provide for your family's financial needs in your absence. The easiest and cheapest way to ensure your family will have financial security in your absence is term insurance

Today, many insurers and web aggregators have started selling 2 Crore term insurance online at very cheaper rates. These online term insurance plans might seem appealing - but might not really be suitable for your family. Why? 

We’ll find out - in this article. Let’s begin with understanding what 2 Crore term insurance plans are and how they work.

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What Is A 2 Crore Term Insurance Plan? How Does It Work?

2 Crore term insurance, as the name implies, is a term insurance policy with a sum assured of INR 2 Crore. If you pass away while the term plan is active, the insurance company will pay a claim amount of INR 2 Crore to your nominee. 

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Will 2 Crore Term Insurance Be Suitable For Your Family?

2 Crore term plans have become quite popular and they may even look good on paper. But, there are chances that a 2 Crore term insurance cover may not be adequate for your family in the future. Hence, it is important to choose your term insurance cover amount after proper calculation. But, how do you calculate it?  

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How To Calculate The Appropriate Term Insurance Cover Amount?

You buy term insurance to protect your family members who are financially dependent on you from financial disruption after you pass away. So, the best way to find out the right term insurance cover amount is by calculating the gap between what you will leave behind and what your family truly requires. 

How do you calculate this gap? By figuring out the difference between the amount your family will need to fulfil their goals (the amount you owe) from the amount you actually possess (the amount you own).

The amount you owe:

  • Living Expenses Fund
    This includes short-term expenses like basic needs, groceries, monthly bills, school fees, etc.
  • Major Expenses Fund
    This includes large, one-time expenses like children’s education, wedding, etc.
  • Major Liabilities Fund
    This includes any loans/liabilities you’ve taken, like home loan, education loan, etc.

The amount you own:
This includes your existing funds. That is, the money you have, cash at the bank, financial instruments you’ve invested in, like fixed deposits, mutual funds, shares, etc. Some of these funds may not be readily available. Hence, you must multiply them by their necessary risk factors. Here are a few risk factors to consider:

  • Savings, cash, fixed deposits @ 100%
  • Equity-linked investments @ 50% 
  • Stock options @ 0% (Because these are high-risk investments, take them at zero value) 
  • Gold & residential property @ 0% (You don't want these assets liquidated to pay for day-to-day expenses, therefore take them at zero value) 

After you subtract the total amount you owe from the total amount you owe, make sure you also factor in inflation of around 6-8%. Why? So that the cover amount will be sufficient for your family in the future. Additionally, if you already have an existing life insurance plan, you can deduct its sum assured from the term insurance cover amount you plan to buy. 

After all of this, the sum you arrive at will be the gap you'll need to fill with a term insurance policy. You can do this entire calculation manually by putting all this onto a spreadsheet. Or, you could use Beshak TruMatch and find out the cover amount appropriate for your family - in less than 5 minutes.

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What Is Beshak TruMatch?

Beshak TruMatch is a term insurance recommendation engine. After you answer a series of questions, it will suggest the exact amount your family will need. Not only this, but it will also suggest the features you should or shouldn’t pick. And then, based on all these aspects, Beshak TruMatch will also recommend a list of term insurance plans that will be appropriate for you and your family.

Check it out here -

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Wrapping up!

You should not simply look for the best term insurance plan for 2 Crores and buy it because it is available at low rates. To ensure the term cover will be sufficient for your family in the future, you should do a detailed assessment. You must consider your short and long-term expenses, loans/ liabilities, existing wealth, etc. before deciding on the cover amount. This calculation can either be done manually or you can check out Beshak TruMatch - the fastest, simplest way to find the perfect term insurance combination for your family’s needs. 

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Key takeaways
  1. A 2 Crore term insurance plan will pay your family a sum assured of INR 2 Crore in case you pass away during your policy duration.
  2. Many insurers and aggregators have started selling 2 Crore term insurance plans at very low costs. The plan may seem appealing but there are chances it might not be suitable for your family.
  3. Every family is unique and has its own requirements. So, ensure you prioritize your family’s needs and accordingly choose a suitable cover. 
  4. You can find out how much cover will be sufficient for your family by taking into account your short-term expenses, long-term expenses, major loans/ liabilities, and existing wealth.
  5. You can do the term insurance cover calculation manually or you can use Beshak TruMatch - the first-ever term insurance recommendation engine built by Beshak to help you find the perfect term insurance plan, with all the right customizations and features that your family needs.
Aakansha Jain
Written by,
Aakansha Jain, Research & Content Ninja at Beshak

Aakansha is a Content Ideator and Writer at Beshak. With her easy-to-understand content, she makes insurance simple for everyone. She comes with a strong background in finance and commerce and wants to help families make positive insurance decisions that are good for a lifetime.

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