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Written By

Fathima Tabasum

Reviewed By

Ashok Manwani

Term Insurance Plan for 5 Crore Online in India

A 5 Crore Term Insurance Plan offers your family a life cover of ₹5 crores in case of your unfortunate demise during the policy term. This financial safety net can help them maintain their lifestyle, pay off debts, and achieve future goals.

While premiums may seem high, they are generally affordable and provide immense peace of mind. Thus, a term plan with a high sum assured can shield against such unpredictability of life.

5 Crore Term Insurance Plan Overview

Here’s a table summarising the key aspects of a ₹5 Crore term insurance policy:

Feature	Description
Sum Assured	₹5 Crores
Purpose	Provides financial security to the family in case of the policyholder’s demise
Eligibility	High annual income individuals, typically ₹25 lakhs or more per year.
Premium	Higher premiums due to the large sum assured
Riders/Add-ons	Options like critical illness, accidental death, waiver of premium, etc.
Premium Payment Options	Monthly, quarterly, half-yearly, or annual
Tax Benefits	Premiums paid are eligible for tax deductions under Section 80C of the IT Act

What is a 5 Crore Term Insurance Plan?

A 5 Crore term insurance policy has a sum assured of 5 crores and provides that death benefit to the beneficiary in case of the policyholder’s unfortunate demise during the policy term.

Besides, a term plan of 5 Crore offers significant financial protection to the insured’s beneficiaries, ensuring a sizeable payout to help cover expenses and maintain their financial well-being.

Term insurance is the most basic and cost-effective way to secure a high coverage amount; however, it doesn’t provide any maturity value.

How Does a 5 Crore Term Insurance Plan Work? 

A 5 Crore term insurance plan is a type of life insurance policy where the sum assured is 5 crore (50 million) Indian Rupees. Here’s how it generally works:

Sum Assured

With a 5 crore term insurance policy, your loved ones get 5 crore rupees if something happens to you during the policy period.

Policy Term

You pick how long you want the policy to last when you buy it.

Premium Payments

You pay regular premiums based on your chosen schedule to keep the policy active. Term insurance is usually cheaper than other types because it only covers life, so you can get a lot of coverage for a lower price.

Death Benefit

If you pass away during the policy term, your beneficiaries get 5 crores as a payout.

Financial Coverage

A high coverage term plan, it serves as a well-built financial safety net, ensuring significant support for the family’s financial needs in case of the insured’s death.

Maturity Benefit

If you outlive the policy term, there's no payout since it's a term plan.

Rider Benefits

By paying a bit more, you can add riders for extra coverage on specific risks. These riders are valid as long as the policy is active.

Benefits of 5 Crore Term Insurance Plan

A 5 crore term insurance plan provides substantial financial coverage to the policyholder's beneficiaries in the event of their untimely demise. Here are the benefits:

Financial Protection for Dependents

Provides substantial financial protection, ensuring that your family or dependents receive a significant sum in the event of your untimely demise.

Income Replacement

Helps replace lost income and cover essential expenses, such as mortgage payments, loans, education fees, and other living costs.

Affordability

Term insurance plans are generally more affordable than other life insurance types, especially when providing high coverage.

Flexibility in Premium Payment

Offers flexible term durations and premium payment options for annual, semi-annual, quarterly, or monthly payments to suit your needs.

Tax Benefits

Premiums paid towards term insurance plans are eligible for tax deductions under Section 80C of the Income Tax Act in India. Death benefits the nominee receives are tax-free under Section 10(10D).

Focus on High Coverage

Although term plans don’t offer maturity benefits, focusing on high coverage ensures maximum protection for your family.

Peace of Mind

Knowing that your loved ones will be financially secure even if you are not around offers peace of mind.

Additional Riders and Benefits

You can add riders or additional benefits, such as critical illness cover or accidental death benefits, for enhanced protection.

Real Life Scenario Example of How 5 Crore Term Plan Works

Aditya, a young professional who is 30 years old, earns 40 lakhs annually. He is recently married and wants to purchase a house. Considering the forthcoming expenses, he used a 5 crore term plan for 35 years and pays an annual premium of ₹70,000.

Criteria	Details
Policy Term	35 years
Age of Insured	30 years
Sum Assured	₹5 Crore
Premium Payment	Annual
Annual Premium	₹70,000 (approx.)
Maturity Benefit	NA (as it is a pure-term plan)

A Formidable Safety Net for Loss, Not for Longevity

Death During the Policy Term

Outliving the Policy Term

Term Maturity Benefits

If Aditya passes away during the 35-year term of the policy, his beneficiaries will receive the sum assured of 5 Crore. This payout can help cover various expenses and financial goals.

No Maturity Benefits

If Aditya outlives the 35-year term of the policy, the term plan typically does not provide maturity benefits, meaning he would not receive any payout.

Disclaimer: The above illustration is a hypothetical example created for educational purposes only and does not represent a real-life scenario.

Will a 5 Crore Term Insurance Plan be Sufficient for You?

To determine if a coverage of 5 crores is sufficient for your family's future expenses, start by evaluating their annual needs. Calculate how much your family requires yearly to maintain their current lifestyle. Next, estimate the years your family might need financial support, which could be based on your expected lifespan or retirement age.

Multiply the annual needs by the estimated number of years to get a rough estimate of the total coverage required. This figure gives you a baseline to understand whether 5 crores is adequate or if more coverage is necessary.

For a quick estimate, you can use Digit’s term insurance calculator by entering your age and annual income to get an estimate. This will give you a more accurate idea of the potential coverage needed.

A general recommendation is to secure insurance that covers 15 times your yearly salary. For instance, if you earn Rs 30 Lakhs annually, you should aim for insurance coverage of Rs 4.5 Crores (15 times 30 Lakhs). If you anticipate needing this coverage over the next 25 years (until you are 60), it's important to account for inflation and rising living costs.

Who Should Buy a 5 Crore Term Insurance?

Anyone with earnings and liabilities must have insurance in their portfolio. While a basic life cover is a necessity for anyone, a 5 crore term insurance is better suited for medium to high-income people that fall into the following groups: 

Young Professionals

Young career professionals should consider a 5 crore term insurance policy to provide financial security for their dependents. With a long working life ahead, this coverage ensures that their families can maintain their standard of living and meet future financial obligations in case of an untimely demise.

People Earning Around 50 Lakhs Annually

People with an income of around 50 lacs must consider purchasing coverage of at least 5 crores. This will provide sufficient financial cover for their families, as high income often elevates people’s lifestyles, like big homes and cars, which also bring liabilities.

Young Parents

Young parents, or those planning to have kids soon, should secure substantial insurance coverage to protect their kids' future, education, and upbringing in case of any unforeseen events.

Business Owners

Business owners, especially those with small and medium-scale businesses, often finance expenses on credit and carry debt. In case of their untimely demise, their family might face business liabilities along with personal loss. Therefore, they should have at least 5 crores in coverage to protect their dependents and cover financial and professional liabilities.

Individuals with Dependents

People who are the breadwinners of their families and have dependents like parents, spouses, or children must consider buying substantial insurance coverage. We know the skyrocketing costs of medical care, education, and other lifestyle expenses. In case of the unfortunate demise of the breadwinner, the dependent family goes through financial turmoil that can be saved with a sufficient insurance coverage.

Taxpayers

Taxpayers seeking significant tax-saving benefits can benefit from a 5 crore term insurance policy. Premiums paid towards such policies are eligible for tax deductions under Section 80C of the Income Tax Act. Additionally, the death benefit received by the nominee is tax-free under Section 10(10D), providing dual benefits of protection and tax savings.

Individuals with Debt

Individuals with significant debts, such as home loans or other liabilities, can opt for a 5 crore term insurance policy. This ensures that the outstanding debts are paid off without burdening their family members in the event of their unexpected death. Knowing that their financial obligations will be resolved provides peace of mind.

How to Choose the Right 5 Crore Term Insurance Plan?

Selecting the right term insurance plan with a coverage of 5 Crores involves several key considerations beyond just the coverage amount. Here are the essential factors to keep in mind:

Compare Premium Rates

Evaluate the premium rates for 5 Crore coverage across various insurers to find the most cost-effective option.

Review Inclusions and Exclusions

Understand the inclusions and exclusions of the policy thoroughly. This ensures you are fully aware of what is covered and what is not, preventing any surprises during the claim settlement process.

Check the Claim Settlement Ratio

The claim settlement ratio reflects the percentage of claims settled by the insurer. A higher ratio indicates a more reliable company, ensuring that your beneficiaries receive the claim promptly in case of your unfortunate demise.

Check for Flexibility

Look for flexibility in the policy regarding premium payments, rider additions, and other options. Some insurers offer conversion options, allowing you to convert your term plan to an endowment plan in later years, thus providing a maturity benefit. Choose options that maximise your returns based on your needs.

Eligibility Criteria for 5 Crore Term Insurance

The exact eligibility criteria may vary slightly between different insurance providers. The following table provides a general overview.

Criteria	Eligibility
Age	Typically, between 18 and 65 years
Income	Minimum income requirements may vary but are typically higher for larger coverage amounts
Medical Examination	Mandatory medical tests to assess health status and pre-existing conditions may impact eligibility
Occupation	High-income occupations are preferred
Citizenship/Residency	Indian citizen

Documents Required for 5 Crore Term Insurance Plan

To purchase a 5 crore term insurance plan, applicants are required to submit the documents listed below:

Identity & Address Proof

Income Proof

Age Proof

Medical Documents

Common Reasons for 5 Crore Term Insurance Plan Rejection

Certain factors can lead to rejection when applying for a 5 Crore term insurance plan. Understanding these reasons can help applicants better prepare and address potential issues beforehand.

Attempting Suicide: Most insurance policies have a suicide clause, typically stating that if the insured commits suicide within a specified period (usually one or two years) from the policy start date, the claim will not be honoured. Also, If the insurance company suspects the application is an attempt to benefit from such circumstances, they may reject the policy.

Participation in Hazardous Activities: Individuals engaging in hazardous activities like skydiving, scuba diving, motor racing, and other high-risk sports are considered high-risk. Insurers may reject applications or charge higher premiums to cover the increased risk of death.

Self-Inflicted Injuries: Policies often exclude coverage for death due to self-inflicted injuries. If there's evidence that the applicant has a history of self-harm or attempted suicide, the insurer may deny coverage.

Criminal Activities: Death resulting from criminal activities such as involvement in illegal activities, participation in violent acts, or membership in criminal organisations is usually excluded from coverage. Insurers may reject applicants with a criminal record to mitigate risk.

Substance Abuse: Substance abuse, like abuse of alcohol, drugs, or other substances, significantly increases health risks and the likelihood of premature death. Insurers may reject applications from individuals with a history of substance abuse.

Pre-existing Medical Conditions: Applicants with severe or multiple pre-existing medical conditions, like chronic diseases like diabetes, heart disease, cancer, etc, are considered high-risk. Insurers may reject their applications or offer coverage with exclusions and higher premiums.

War and Terrorism: If an applicant is in a high-risk profession or region prone to acts of war or terrorist activities, the insurer may deny coverage to avoid potential large-scale claims.

Non-Commercial Aviation: The risk of aviation accidents is substantial. Insurers may refuse to accept applications or increase premiums for individuals involved in aviation activities outside commercial airline travel, including pilots, crew members, or frequent flyers in non-commercial aircraft.

Tax Benefits for 5 Crore Term Insurance Policies

For individuals holding term insurance policies worth 5 Crore INR, several tax benefits can be availed under the Indian Income Tax Act, 1961. Here is an overview of the key tax benefits related to such high-value term insurance policies:

Section 80C: Premium Payments

Deduction Limit: Under Section 80C, the premium paid for a term insurance policy is eligible for a tax deduction, subject to a maximum limit of 1.5 lakh INR per financial year.
Eligibility: To qualify, the premium must not exceed 10% of the sum assured if the policy is issued on or after April 1, 2012. The premium should not exceed 20% of the sum assured for policies issued before this date.
Applicability: This deduction is applicable to individuals and Hindu Undivided Families (HUFs).

Section 10(10D): Maturity Benefits

Tax Exemption: Any sum received under a term insurance policy, including the death benefit, is fully exempt from tax under Section 10(10D).
Conditions: This exemption is applicable only if the premium paid does not exceed 10% of the sum assured for policies issued on or after April 1, 2012. The premium should not exceed 20% of the sum assured for policies issued before this date.
TDS: If the policy does not meet the criteria mentioned above, a 5% tax deduction at source (TDS) will be applicable on the payout if it exceeds 1 lakh INR in a financial year.

Section 80D: Health Riders

Deduction for Health Riders: If the term insurance policy includes health-related riders such as critical illness or accidental death benefit riders, the premium paid towards these riders is eligible for a tax deduction under Section 80D.
Deduction Limit: The deduction limit under Section 80D is up to 25,000 INR for individuals under 60 and 50,000 INR for senior citizens. This limit is in addition to the limit under Section 80C.

A 5 crore term insurance plan is a financial safety net for your family. It provides a substantial lump sum payout in case of your untimely demise, ensuring their financial stability. By investing a relatively small amount in premiums, you can secure a large sum for your loved ones, helping them confidently guide life's uncertainties.

Discover Other Sum Assured Options for Term Plan As Per Your Need

Choosing the right sum assured is crucial for selecting the best term life insurance plan to protect your family’s financial future. Here are the available options for sum assured amounts that might suit your needs:

25 Lakh

Term Insurance Plan

50 Lakh

Term Insurance Plan

75 Lakh

Term Insurance Plan

3 Crore

Term Insurance Plan

4 Crore

Term Insurance Plan

10 Crore

Term Insurance Plan

15 Crore

Term Insurance Plan

20 Crore

Term Insurance Plan

FAQs about 5 Crore Term Insurance Plan

All

Coverage

Eligibility

Adjustments

Tax

Claims

What are the major limitations of 5 crore term insurance?

5 crore term insurance offers robust death benefit protection at affordable premiums. However, it lacks investment features like maturity, surrender, or survival benefits. Consequently, it's not designed for wealth accumulation but excels at safeguarding dependents from financial hardship in case of the policyholder's untimely demise.

Is accidental death covered in 5 crore term insurance?

Yes. 5 crore term insurance covers death due to an accident. However, there are certain exclusions to this, like accidents due to intoxication, criminal activity, adventure sports, etc.

Is there an option of extra payout benefit in 5 crore term insurance in case of accidental death?

Yes, extra payout benefits can be taken with an accidental death benefit rider in term insurance. It provides an additional payout if the policyholder dies in an accident.

Is there a waiting period in 5 crore term plans before the coverage begins?  

No, there is no waiting period in term plans. The coverage begins as soon as the policy is issued. 

Is there an eligibility criteria for term insurance for 5 crore?

Yes, to buy a 5 Crore term insurance plan, you generally need to be between 18 to 65 years old and have a stable income to afford the premiums, with proof of income possibly required. A medical check-up may be necessary to assess your health. Additionally, your occupation and lifestyle choices can impact eligibility and premium rates. Each insurer may have specific requirements, so it's best to check with them directly.

How to calculate the premium for a 5 crore term insurance policy?

To calculate the premium for a 5 Crore term insurance policy, factors like age, health, lifestyle habits (e.g., smoking), occupation, and policy term are considered. Generally, younger and healthier individuals pay lower premiums.

For example, if you're a 30-year-old non-smoker with no health issues, you can use an online calculator to input your details and desired coverage (5 Crore). This will provide an estimated annual premium range, such as ₹20,000 to ₹30,000. Comparing quotes from different insurers can help you find the best rate.

What is the minimum entry age for term insurance of 5 crore?

Most insurers require individuals to be at least 18 years old to purchase a term insurance policy. This is the standard minimum entry age, ensuring that policyholders are legally eligible to enter into a contract.

What is the free-look period for the 5 crore term insurance policy?

The free-look period for a term insurance policy is 30 days from receiving the policy document. During this time, you can review the policy and cancel it if you are unsatisfied.

To cancel, you must send a written request and return the original documents. The insurance company will refund your premium after deducting any charges for covered days, medical tests, and stamp duty. This period ensures you have time to make an informed decision.

Will a 5 crore term insurance plan be enough for your needs?

A 5 crore term insurance plan might be enough if it covers income replacement, outstanding debts, and future financial goals. Typically, coverage should be 10-15 times your annual income. For example, if you earn ₹50 lakhs per year, a 5 crore plan may be suitable. Consider your family's living expenses and inflation. Evaluate your financial needs to decide if 5 crores is sufficient or if you need higher coverage.

How can I purchase a ₹5 crore term plan online?

To purchase a ₹5 Crore term plan online, visit the insurer's website and use the premium calculator to estimate costs based on your age, health, and policy term. Choose and customize your plan, including any additional riders. Fill out the application form with your details and upload the required documents like ID and income proof. Complete any necessary medical exams. Pay the premium online, and once verified, the insurer will issue your policy.

What is the income required for ₹5 crore term insurance?

A ₹5 Crore term plan is generally suited for individuals with an annual income of at least ₹30 lakhs. This ensures the policy is affordable and meets insurers' requirements for high coverage.

Are there any tax implications if my beneficiary receives the death benefit?

No, your beneficiary's death benefit from a term insurance policy is generally tax-free under Section 10(10D) of the Income Tax Act, ensuring your family gets the full amount without any tax deductions.

Can NRIs purchase a 5 Crore term insurance plan in India?

Yes, NRIs can purchase a ₹5 Crore term insurance plan in India. They need to provide necessary documents like a passport, visa, and proof of income. Medical tests might be required, and premiums can be paid from NRE, NRO, or FCNR accounts. Once approved, the policy offers the same benefits as for residents.

How does the insurer determine the sum assured for a 5 Crore term insurance plan?

Insurers determine the sum assured for a ₹5 Crore term insurance plan based on your annual income, age, health, occupation, and financial obligations. They also consider the number of dependents you have and any existing life insurance coverage to ensure the amount provides adequate financial protection for your beneficiaries.

Does 5 crore term life insurance have cash value?

No, 5 crore term life insurance policies do not have cash value. They are purely designed to provide a death benefit to beneficiaries in case of the policyholder's demise, without accumulating savings over time.

What happens if I survive the policy tenure?

If you survive the policy tenure, no benefits are paid out, and the coverage ends. You may need to buy a new policy or extend the current one if needed.

If my nominee is overseas, can they still submit a claim for my 5 crore term plan?

Yes, if your nominee is overseas, they can still submit a claim for your 5 crore term plan. Most insurers allow claims to be filed online or via mail, and they provide support to assist with the process.

How much term insurance will be enough for my family?

To determine how much term insurance will be enough for your family, consider factors like monthly expenses, debts, future financial goals, and your income. A common rule of thumb is to have coverage equal to 10-15 times your annual income.

Are there any tax benefits with the term insurance 5 crore plan?

The premiums you pay for the 5 crore term plan are eligible for tax deductions under Section 80C of the Income Tax Act. Additionally, the death benefit proceeds received by your beneficiaries are exempt from taxes under Section 10(10D) of the Income Tax Act.

What is the health check-up process for a 5 Crore Term Insurance Plan?

The health check-up process for a 5 Crore Term Insurance Plan typically involves a detailed medical examination, including blood tests, ECG, and sometimes other tests based on age and health history. The insurer assesses your health risk to determine premium and coverage eligibility.

Do lifestyle habits like smoking and drinking affect the premium of a 5 Crore Term Insurance Plan?

Yes, lifestyle habits significantly affect the premium. Insurers categorize individuals into different risk categories. Smokers and heavy drinkers usually fall into higher risk categories, resulting in higher premiums due to the increased likelihood of health issues.

How does the occupation type influence the premium and coverage options for a 5 crore term insurance plan?

Occupation type significantly influences term insurance premiums and coverage options for a 5 crore plan. Higher-risk occupations, such as those involving physical labour or hazardous environments, typically result in increased premiums or limited coverage choices. Conversely, lower-risk professions may qualify for more affordable rates and wider coverage options.

How do riders impact the overall cost and value proposition of a 5 crore term insurance plan?

Riders can significantly increase the overall cost of a 5 crore term insurance plan, but they also enhance its value proposition by providing additional coverage for critical illnesses, accidental death, or disability, offering comprehensive financial protection beyond the basic life insurance coverage.

What is the process of increasing the sum assured of a 5 crore term insurance plan after a few years?

Increasing the sum assured of a 5 crore term insurance plan typically involves purchasing a new term insurance policy with the desired increased coverage or opting for a policy with an increasing cover feature (adding riders). The former requires a new medical examination. Consult your insurer for specific options and terms.

If the sum assured of a 5 crore term insurance plan is increased, are there any limitations or health checks involved?

Increasing the sum assured in your 5 crore term insurance plan may involve additional health checks and underwriting, depending on the insurer's policies and the increase amount. Some insurers may allow a certain percentage increase without further health checks, while larger increase might require medical examinations.

How does the concept of human life value apply to determining the appropriate coverage amount for a 5 crore term insurance plan?

Human life value quantifies an individual's financial worth, considering income, dependents, and expenses. For a 5 crore term insurance plan, this concept helps determine if the coverage adequately protects dependents' financial needs in case of the insured's untimely death. Calculating the present value of future earnings and considering liabilities can help assess whether a 5 crore cover is sufficient to maintain the family's desired lifestyle.

Read More: Human Life Value Calculator

What are the specific exclusions and limitations in 5 crore term insurance plans?

5 crore term insurance plans typically exclude coverage for death due to suicide (initial years), war, terrorism, hazardous occupations, and pre-existing illnesses not disclosed during policy inception. Additionally, there might be limitations on coverage for specific high-risk activities or geographical locations.

What happens to claim settlement when a policyholder moves to a different country after purchasing a 5 crore term insurance plan?

Claim settlement for a 5 crore term insurance policy might be affected if the policyholder relocates to a different country. The validity of the policy in the new country, the claim process, and applicable terms and conditions may vary depending on the insurer's policies and the specific terms of the insurance contract.

Which one should I choose, health insurance or term insurance?

The best approach is to have both. Term insurance provides a safety net for your loved ones in case of your untimely demise. A health insurance plan, on the other hand, supports you and your family by covering medical expenses while you're still around.

If your focus is on long-term financial protection for your family, term insurance is crucial. But for managing day-to-day health risks and medical emergencies, health insurance is equally important.