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.
Table of Contents
5 Crore Term Insurance Plan Overview
Here’s a table summarising the key aspects of a ₹5 Crore term insurance policy:
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.
Here's an example of how the 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.
A Formidable Safety Net for Loss, Not for Longevity
Term Maturity Benefits
No Maturity Benefits
Will a 5 Crore Term Insurance Plan be Sufficient for You?

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.
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.
Why Do You Need a 5 Crore Term Insurance Plan?
While a figure of 5 crore might look extremely high and overwhelming, the reality is that in today's time, an annual salary of 50 lacs to 1 crore has become quite common.
Going by the thumb rule, the required coverage is 10 times. Hence, a 5 crore term insurance for anyone earning around 50 lacs per annum is the perfect financial protection.
Here are other major benefits that a 5 crore term insurance can provide:
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Why You Might Need a 5 Crore Term Plan: A Real-Life Scenario
Why You Might Need a 5 Crore Term Plan: A Real-Life Scenario
Aditya, a professional in his late 40s, has an annual income of ₹70 lakhs. He is married, has a child in class 10, and his wife is a homemaker. Aditya holds a term insurance plan with a coverage of ₹1 crore, but he never evaluated or upgraded his coverage.
Unfortunately, at the age of 46, Aditya passed away in an accident, leaving behind a home loan liability of 80 lacs, a car loan of 12 lacs, and the expense of his son's higher studies abroad, which amounted to 1 crore. Aditya’s current term insurance plan falls short of covering his family’s financial needs.
The total liabilities and future requirements exceed ₹2 crore, leaving a significant gap. Ideally, the sum assured should be at least 10 times his annual income, meaning a coverage between ₹5 crores and ₹7 crores would be more appropriate. This higher sum would ensure better financial security and adequately cover his family’s future needs.
Disclaimer: The above illustration is a hypothetical example created for educational purposes only and does not represent a real-life scenario.
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.
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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.
How to Calculate the Premium for a 5 Crore Plan?
How to Calculate the Premium for a 5 Crore Plan?
To calculate the premium for a ₹5 crore term insurance plan, you need to consider several factors such as the policyholder’s age, health, lifestyle, occupation, and the policy term. Additionally, you might want to explore extra coverage options like critical illness riders or accidental death benefits.
Let’s assume a 1 cr term insurance plan details for Prakash as an example:
- Age: 30 years
- Lifestyle Indicator: Non-smoker
- Policy Term: 20 years
- Sum Assured: 5 Crore
- Riders: No additional riders
Insurers calculate the base rate based on age, health status, and sum assured. In Prakash’s case, let's assume that the base rate is ₹1.5 per thousand of the sum assured. Here is how the premium is calculated:
- Base Premium = (Sum Assured / 1,000) × Base Rate
- Base Premium = (5,00,00,000/1,000) × 1.5 = ₹75,000 per year
Prakash’s base premium comes out to be ₹75,000 per year. This amount reflects his age and healthy lifestyle, providing comprehensive coverage for his substantial sum assured.
While Prakash has opted not to include additional riders in his policy, he can always revisit his options. Riders such as those with Critical Illness or Accidental Death Benefits could be considered if his needs change or he wishes to enhance his policy's coverage further.
Disclaimer: The above calculations are only for illustration purposes. For an accurate calculation, it's best to use an online premium calculator provided by insurance companies or consult with a financial advisor as they consider all the specific details and current rates.
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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
Other Documents
How to Choose the Right 5 Crore Term Insurance Plan?

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.
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Common Reasons for 5 Crore Term Insurance Plan Rejection

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.
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.
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Tax Benefits for 5 Crore Term Insurance Policies
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.
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FAQs about 5 Crore Term Insurance Plan
What are the major limitations of 5 crore term insurance?
Is accidental death covered in 5 crore term insurance?
Is there an option of extra payout benefit in 5 crore term insurance in case of accidental death?
Is there a waiting period in 5 crore term plans before the coverage begins?
Is there an eligibility criteria for term insurance for 5 crore?
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?
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?
How can I purchase a ₹5 crore term plan online?
What is the income required for ₹5 crore term insurance?
Are there any tax implications if my beneficiary receives the death benefit?
Can NRIs purchase a 5 Crore term insurance plan in India?
How does the insurer determine the sum assured for a 5 Crore term insurance plan?
Does 5 crore term life insurance have cash value?
What happens if I survive the policy tenure?
If my nominee is overseas, can they still submit a claim for my 5 crore term plan?
How much term insurance will be enough for my family?
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?
Do lifestyle habits like smoking and drinking affect the premium of a 5 Crore Term Insurance Plan?
How does the occupation type influence the premium and coverage options for a 5 crore term insurance plan?
How do riders impact the overall cost and value proposition of a 5 crore term insurance plan?
What is the process of increasing the sum assured of a 5 crore term insurance plan after a few years?
If the sum assured of a 5 crore term insurance plan is increased, are there any limitations or health checks involved?
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?
What happens to claim settlement when a policyholder moves to a different country after purchasing a 5 crore term insurance plan?
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Disclaimer
- This is an informative article provided on 'as is' basis for awareness purpose only and not intended as a professional advice. The content of the article is derived from various open sources across the Internet. Digit Life Insurance is not promoting or recommending any aspect in the article or its correctness. Please verify the information and your requirement before taking any decisions.
- All the figures reflected in the article are for illustrative purposes. The premium for Coverage that one buys depends on various factors including customer requirements, eligibility, age, demography, insurance provider, product, coverage amount, term and other factors
- Tax Benefits, if applicable depend on the Tax Regime opted by the individual and the applicable tax provision. Please consult your Tax consultant before making any decision.
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