Apart from the love, laughter, and compassion that come with raising a family today, it also comes with plenty of financial responsibilities. For young parents, especially those thinking about securing their family’s future, a term plan for 1 crore could very well be a great place to start. However, would it be enough?

Here is a look at everything that you might need to help you figure out whether ₹1 crore is adequate coverage, or if you should consider a higher cover, like a 10 crore term insurance policy.

What is a Term Insurance Plan?

A term insurance plan is literally one of the simplest forms of life insurance that is offered by insurers today. Under such plans, you pay a small premium for a fixed term, like 20–30 years, and the plan provides your policy nominee with the full sum assured, in case of your untimely demise. However, no maturity benefit is given if you survive the policy term.

One of the reasons term insurance is ideal for young families is that it offers high coverage at an affordable price. But there is an important question that you need to answer before you decide to buy a plan: how much coverage do you really need?

Why People Choose a Term Plan for 1 Crore

One of the main reasons a term plan for 1 crore is popular is that it is a good round figure that is usually enough to clear debts, support your child’s education, and help your spouse maintain their lifestyle. Another reason? Even at this amount, the premiums are still affordable.

Premiums for these plans are particularly more affordable for young and healthy people than older, ageing individuals. So it is always better to look into purchasing these plans in your late 20s or early 30s.

When ₹1 Crore May Be Enough?

A term plan for ₹1 crore sits quite well and is a great way to plan your family’s financial future. Here are a few reasons why this is true.

  • If you are someone who is just starting out with trying to secure their financial future, but has limited income and no major liabilities yet.
  • In situations where your spouse is earning and is financially independent
  • When you have a small family with modest lifestyle goals
  • You are thinking about eventually increasing your plan coverage.

Why You Might Need Higher Coverage?

While the term plan for 1 crore can undoubtedly fulfil a lot of financial goals for the future and protect your family in case of your demise, in certain situations, you might need a bigger coverage amount.

This is why, if you want true peace of mind, you should be open to looking beyond the ₹1 crore benchmark. In such cases, a 10 crore term insurance might just work better, even if it sounds excessive. However, trust us when we tell you that the 10 crore amount can be very realistic for high-income families or even for those with long-term responsibilities.

Here are a few things that might make you want to go big on the coverage:

  • If your children are young and their schooling and college costs will span decades
  • If you are the sole earner in the family
  • If you have a big home loan or other financial liabilities
  • If you want to leave behind wealth for your family and not just survive on the basics

Final Thoughts: Start Small, Plan to Upgrade

We understand that the 10 crore term insurance plan might seem like a lot at the moment. So, if you’re not interested in investing at the moment, then opting for a term plan for 1 crore right now would be the best thing to do without a doubt. The bottom line remains that some kind of term insurance is better than none. However, it is also equally important to review your plan every few years as your income grows and your responsibilities continue to expand.

The good news, on this front, is that many insurers now offer increasing term insurance. Such plans let you start small and increase the sum assured over time. If that is not something you would like, you could also buy multiple policies to layer your coverage.