Entrepreneurship is an exhilarating adventure with challenges and opportunities. As an entrepreneur, you invest time, effort, and money into building your business.
However, financial security is one crucial aspect often overlooked amidst the hustle and bustle of planning and action. Having a term plan 1 crore in place can help secure your family while you can focus on building your business.
Understanding a Term Plan
A term plan is pure life insurance extended to financial protection for your family in case of your unfortunate demise. It secures your loved ones financially when you are not there to care for them. A term plan of 1 crore specifically proposes an assured sum of ₹1 crore to be paid to your loved ones if you pass away during the policy tenure.
Unlike other life insurance policies, a term plan focuses solely on financial protection without any investment component. Thus, it is the most affordable option for entrepreneurs looking for high coverage and low premiums.
Why Entrepreneurs Need a Term Plan 1 Crore
Investing in a term plan of 1 crore today can safeguard your loved ones against uncertainties and ensure your entrepreneurial journey remains financially stable.
1. Financial Security for Your Family
Starting any new business can be full of financial risk. You may use up your savings or reinvest the profits toward growth. Your dependents risk being burdened with debts or financial liabilities if anything untoward happens. A term plan of 1 crore guarantees that your dependents will not suffer financial disruptions and will maintain their standard of living.
2. Debt Repayment Support
Many entrepreneurs utilise loans for their ventures, whether a business loan or a personal borrowing. If you take up a big loan, your sudden absence may put your family in financial distress. The term plan payout will help them service their debts, preventing losing assets or equity in your business.
3. Affordable Premiums with High Coverage
A term plan of 1 crore is undoubtedly one of the most reasonably priced life insurance options. Compared to other plans, a term plan offers much higher coverage at a comparatively lower premium. For instance, a healthy 30-year-old can have a ₹1 crore term plan for a premium as low as ₹10,000 per year, with variations depending on the insurer and the policy term.
4. Flexibility in Policy Terms
Term plans are flexible in terms of tenure; hence, they let you decide on the duration of your policy based on your financial goals. As a new entrepreneur, you can choose a plan covering you until retirement or your business is sufficiently stable and established.
5. Tax Benefits
A term plan of ₹1 crore can also be considered for certain tax deductions under Section 80C of the Income Tax Act up to ₹1.5 lakh in a financial year. The payout to the nominee is also exempt from tax under Section 10(10D), making this plan a tax-efficient option.
6. Peace of Mind to Focus on Business Growth
Entrepreneurship demands full attention and strategy formation. Being able to focus on growing your business while being certain that your family’s financial future will be secure in case of any unplanned incident is a great relief.
How to Choose the Right Term Plan 1 Crore
Choosing the right term plan requires careful consideration of multiple factors. Here are some key aspects to evaluate:
1. Claim Settlement Ratio (CSR)
CSR represents the percentage of claims an insurer has settled. Choose a company with a high CSR (above 95%) to ensure a smooth claim process for your family.
2. Premium Affordability
Compare premium rates from different insurers and select a policy that fits your budget while offering maximum benefits.
3. Rider Options
Many insurers offer additional riders like accidental death benefits, critical illness cover, and waiver of premium. These add-ons enhance your coverage and provide extra financial security.
4. Policy Tenure
Choose a tenure that covers you until your dependents are financially independent. Ideally, a policy lasting until 60-65 years of age is recommended for entrepreneurs.
5. Online vs. Offline Purchase
Online policies often have lower premiums than offline plans since they eliminate intermediary costs. Consider buying a term plan of 1 crore online for better cost savings.
Conclusion
A term plan of 1 crore is a prudent financial choice for an entrepreneur. The major advantages are family protection, debt servicing, tax exemption, and peace of mind to concentrate on business. So, take the first step towards securing your future and explore the best term insurance plans available.
Read more:
Why a 1 Crore Term Plan is a Smart Choice for New Entrepreneurs