Understanding 15 Crore Term Insurance: A Smart Investment for High-Net-Worth Individuals
High-net-worth individuals (HNIs) often require tailored solutions to address their complex financial strategies and diverse investment portfolios. However, term insurance, which was mostly associated with middle-income individuals, has proven to be of significant value for HNIs, too. A term insurance 15 crore policy is a smart investment for HNIs. This substantial amount of coverage guards against unexpected events and ensures the long-term security of their wealth and legacy.
Now, let’s explore why investing in a 15 crore term insurance policy is wise and how it caters to the needs of high-net-worth individuals in India.
Why High-Net-Worth Individuals Opt for a 15 Crore Term Insurance?
HNIs often assume that their assets are sufficient to secure their family’s future. However, liquidating investments during emergencies can disrupt financial planning and lead to significant losses. Term insurance captures all these needs, providing immediate liquidity and financial stability without disturbing existing investments.
1. Protection of Family Wealth
Term insurance is a life insurance product that offers a high sum assured at affordable premiums. It is entirely different from other insurance policies since it doesn’t offer maturity benefits but pure life coverage. A term insurance of 15 crore guarantees that the family gets liquid funds without having to sell valuables such as real estate or stock.
2. Legacy Planning
For HNIs, legacy planning can involve using life insurance, including permanent life insurance policies, to secure their family’s financial future. These provide efficient transfer of wealth to beneficiaries, along with the potential benefits of tax advantages and reduced administrative complexity.
3. Covering Large Liabilities
To HNIs, liability can be high, including business and other loans or mortgages. A term insurance of 15 crore guarantees that these liabilities are paid without compromising family wealth.
4. Estate Planning and Liquidity
The benefit of a term insurance policy is that the payout is made in a lump sum, fulfilling the estate taxes and other incidental expenses incurred on the transfer of wealth.
5. Tax Benefits
HNIs can enjoy tax benefits from Section 80C. Premiums paid under the policy are deductible, and death benefits are typically tax-free under section 10(10D) of the Income Tax Act. This results in maximising the financial benefits of this plan.
6. Peace of Mind Amid Uncertainty
Life has moments of uncertainty, especially for those in fast-paced lifestyles or regions. Undoubtedly, a term insurance of 15 crore is a financial safety net that makes uncertain events less daunting.
Key Considerations for HNIs While Buying Term Insurance
Term insurance comes in various types. Depending on the coverage required, plans can range from 1 cr life insurance to ₹15 crore or more. However, it is essential to carefully evaluate several factors before purchasing term insurance. Some of the key considerations include:
- Evaluating insurance needs is key to determining the right coverage amount—experts often advise choosing a suitable life cover at least 10 times the annual salary.
- A variety of plans are available for HNIs. It's advisable to compare options online to identify the best term plan.
- Add Riders such as critical illness or accidental death riders. These riders are powerful means of enhancing the plan's overall coverage.
- Paying premium schedules can also be regular or restricted depending on financial ability.
Conclusion
A 15 crore term insurance plan is more than just a financial product necessary for gaining stability. It also provides peace of mind, making it an ideal option for HNIs. Low premiums, broader coverage, tax benefits, customisable riders, and flexible payment options are among the key advantages, making it an essential component of a robust wealth protection strategy.
