₹1 Crore Term Insurance Plan

For most Indians earning ₹8–15 lakh per year, a ₹1 crore term insurance cover is a reasonable starting point. However, if you have large financial responsibilities, you may need higher coverage.

₹1 crore term insurance cover may be enough if:

• Your major loans are already paid off
• Your spouse is financially independent
• You have built sufficient savings and investments

A simple rule of thumb used by financial planners is that your life insurance coverage should be 10-15 times your annual income. Apart from income, you should also consider:

• Any ongoing home or car loans
• How many people depend on your income
• Whether your spouse earns or relies on you financially
• Children’s education costs, especially 10-15 years from now
• Inflation, which reduces the value of money over time

For a more accurate estimate, use a Human Life Value calculator that factors in income, expenses, liabilities, and future goals.

The examples below will help you understand whether a ₹1 crore term plan is enough in different situations.

Scenario 1: Who is ₹1 Crore Enough For?

Rohan was a 30 year old professional earning ₹15 lakh per year. He was married, had dependent parents, and already owned a family home. He bought a ₹1 crore term plan for 25 years.

Rohan passed away at the age of 40 due to an accident. At that time:

• His wife was earning
• He had no major loans
• He had a 6-year-old daughter whose education needed funding
• He had built good savings and investments

Because his liabilities were low and assets were adequate, a ₹1 crore term plan was reasonably sufficient for his family.

Scenario 2: Who May Need More Than ₹1 Crore?

Aryan was a 26 year old professional earning ₹10 lakh per year. At that time, his only dependents were his retired parents. He planned to get married and buy a house in the future, so he bought a ₹1 crore term plan for 30 years.

Unfortunately, Aryan passed away at the age of 42 due to a cardiac arrest. By then, he had:

• A dependent wife and two children
• An outstanding home loan of ₹40 lakh
• Dependent parents
• Future expenses like children’s higher education

In this case, the ₹1 crore cover was not sufficient to handle all responsibilities. Aryan should have reviewed and increased his coverage as his life responsibilities grew.

The cost of a ₹1 crore term life insurance plan mainly depends on the age at which you buy it. The earlier you buy, the lower your premium.

Premiums rise sharply after age 35 and again after age 45, even if you are healthy.

Here is a look at how premiums for a ₹1 crore term life insurance plan increase across different age groups, up to 70 years: 

Example:

A 30-year-old salaried male can get a ₹1 Crore term plan coverage till age 70 for just ₹795/month today. If he had had the same policy three years earlier, the premium would have been ₹689/month.

However, if he waits five more years, the premium increases to ₹1,052 per month. This means paying an extra ₹86,316 over the policy term for the same ₹1 crore coverage.

So, buying term insurance early helps you lock in lower premiums, saves money over the long run, and ensures your family is financially protected at a lower cost.

Note: The premiums shown are applicable to customers purchasing Glow Plus term insurance directly through the online portal. These are standard rates for healthy, salaried male individuals who are non-smokers and non-drinkers. Premiums may vary for direct purchase journeys and are subject to change. The final premium and eligible sum assured will depend on the outcome of the underwriting process.

Digit Term Life insurance does not cover the following:

• Suicide within the first 12 months of policy commencement
• Death caused by drugs, alcohol, or substance abuse if it was not declared while buying
• Death during criminal or illegal activities
• Non accidental self-inflicted injuries
• Pre-existing illnesses that were not disclosed at the time of purchase
• High-risk activities not disclosed at proposal stage
• War related events or acts of terrorism 

Note: Exclusions are governed by IRDAI norms and specific policy terms. Always refer to the policy document. 

Your term insurance premium saves you tax in two ways:

1. Section 80C: Premium Payments

The annual premium you pay towards your term plan is eligible for deduction up to 1.5 lakh per year under Section 80C of the Income Tax Act.

Example: If you pay 8,000 per year as premium, your taxable income reduces by 8,000. At a 30% tax bracket, you save 2,400 in taxes.

Who Can Qualify?

If your policy was issued on or after April 1, 2012, your premium should not be more than 10% of the sum assured. The premium should not exceed 20% of the sum assured for policies issued before that date.

2. Section 10(10D): Death Benefit

The entire 1 crore that your family receives as a death benefit is 100% tax-free. They don’t pay a single rupee in income tax on it.

• Conditions: For policies issued on or after April 1, 2012, the premium must not exceed 10% of the sum assured. The premium must not exceed 20% of the sum assured for older policies.
• TDS: If your policy doesn’t meet these conditions, a 5% tax will be deducted at the source if the payout exceeds 1 lakh in a financial year.