Life is full of unexpected incidents. One moment you’re here, the next minute a completely unprecedented event may result in an unfortunate event. That is why it is so important to be prepared.
When you go, it is not just the body you leave behind, but rather a family of loved ones who depend on you for moral support, financial stability, and adoration. While it is difficult to replace the love that you gave them, it is possible to help them out with the financial assistance they require to move on and plan for their future while they continue to live without you.
Term life insurance is one of the many life insurance plans that are designed to help your loved ones sustain the tough times in the event of your untimely demise.
What is term life insurance?
Term life insurance is the most reasonable life insurance policy available in India for all individuals. Whether you are a Resident Indian, a Non-Resident Indian, or a Person of Indian Origin, a term life insurance policy is a saviour for your loved ones.
When purchasing a term life insurance plan, you must choose the sum assured of your policy and the tenure. The sum assured is the amount that the insurance provider pays your loved ones in the event of your untimely death during the policy tenure.
Term insurance policies are available for a tenure of 10-100 years based on your preference, and you can choose an increasing or decreasing sum assured or a single premium plan.
Is 50 lakh term insurance enough in India?
It is very important to carefully consider the sum assured of your term life insurance. The value of the Indian rupee fluctuates based on the rate of inflation. Therefore, the sum assured that you choose should be sufficient no matter when it is paid out.
A 50 lakh term insurance is a good plan with a high value of sum assured. However, whether or not it is enough depending on a variety of factors, which are as follows:
- Consider your family’s lifestyle. If they received the death benefit of a 50 lakh term insurance, how long do you estimate they can survive till they find an alternative means of income?
- Based on your policy tenure, how much do you think would be the value of a 50 lakh term insurance in the next few years? Keep in mind that the objective of life is to keep living, so if your policy tenure is long-term, do you think a 50 lakh term insurance will be a sufficient amount when subjected to the rate of inflation?
- Are you planning on adding riders to your 50 lakh term insurance plan? Addons such as critical illness cover, accidental death cover, etc., can bump up the sum assured if you are subjected to specific circumstances. Your family will need to pay a large amount of money toward treatment costs, especially if you don’t have sufficient health insurance coverage. Riders can help compensate for the loss in case they still lose you despite their efforts to wish you a speedy recovery.
- A 50 lakh term insurance plan is well-suited to amount to a low rate of premium. If the premium is less than 10% of the sum assured and less than INR 1.5 lacs per annum, it will be eligible for tax exemption.
- Furthermore, INR 50 lakhs is a decent sum of money that could be used by your beneficiaries to repay loans and other liabilities that are not subject to change by the rate of inflation. The rates of interest are predetermined therefore, no matter how much time passes and the value of 50 lakhs in that moment of time, they can still use the money to plan their finances.
You need to evaluate how these circumstances apply to you and your family. Normally, a 50 lakh term insurance plan is a decent life insurance policy for your loved ones. However, it would depend on their lifestyle and your financial planning to determine whether it is a sufficient sum assured for you.
Is term insurance valid outside India?
Term insurance policies are valid for everyone who purchases a plan in India, regardless of where you live. If you purchase a term plan in India and then move abroad, your policy does not terminate due to a change of location. However, you will need to notify your insurance provider.
There are several benefits to purchasing term insurance in India for Indian citizens as well as NRIs and PIOs, which are as follows:
- It is easy to purchase a term insurance plan for a low rate of premium in India.
- If you are settled abroad but have family in India, it is better to have a policy plan from an Indian insurance provider. It is much easier for your loved ones to file a claim when the insurance provider is from the same country. Whereas, if your family is in India and your insurance provider is in another country, they have to bypass a lot of red tape and jump through hoops to file the claim and receive the benefits.
- Purchasing a term plan in India guarantees that your premiums are also determined in INR. Therefore, if you live in a country that has a higher currency rate than INR, you save a lot of money by paying premiums on the value of the Indian Rupee. On the other hand, if you live in a country where the value of the currency is lower than the INR, then the sum assured that your family receives is much higher than they would if you opted for an insurance policy in your resident country.
So, if you are wondering is term insurance valid outside India, then the answer is yes. It is valid and quite beneficial to acquire a policy in India even if you don’t live here.
Conclusion
Term insurance plans need to be tailored to the needs of you and your family. A 50 lakh term insurance plan might be more than enough for some but insufficient for others. You need to evaluate your circumstances and the lifestyle of your family members when making the decision. Even if you live outside India, it can be a sufficient sum of money depending on the value of the sum assured.
Joshua White is a passionate and experienced website article writer with a keen eye for detail and a knack for crafting engaging content. With a background in journalism and digital marketing, Joshua brings a unique perspective to his writing, ensuring that each piece resonates with readers. His dedication to delivering high-quality, informative, and captivating articles has earned him a reputation for excellence in the industry. When he’s not writing, Joshua enjoys exploring new topics and staying up-to-date with the latest trends in content creation.
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