5 Crore Term Insurance Plan

What is a 5 Crore Term Insurance?

A Rs. 5 crore term insurance is a term insurance plan that provides a life cover of Rs. 5 crore. In case of an unfortunate event with the life assured during the policy term, the plan offers the complete sum assured amount of Rs. 5 crore in a lump sum form, as regular income, or as a mix of these options to the nominee. This payment can help your family members in difficult times of your absence in case you are the sole earner of the family. 

List of Term Insurance Plans for 5 Crore

There is a wide range of term insurance plans available in the market, which can be easily customized according to the requirements of the insurance buyers. Every plan differs in terms of features, benefits, and premium rates. Let’s take a look at the term insurance plan that offers a sum assured amount up to Rs.5 crore.

Disclaimer: The list of insurers mentioned are arranged according to the alphabetical order of the name of insurance company respectively. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. The list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website www.irdai.gov.in

When it comes to a term insurance policy, it also works as an income replacement for the family in case of the demise of the insured person along with the benefit of life cover. Furthermore, if you choose to purchase term insurance of 5 crores then it can work as an asset to take care of future liabilities like repaying for a home loan, supporting for child’s higher education, etc. in your absence.

Why Buy a ₹5 Crore Term Insurance Plan?

In today’s fast-paced urban lifestyle, where expenses and long-term financial responsibilities continue to rise, a ₹5 crore term insurance plan is no longer a luxury, it’s a necessity. For working professionals, entrepreneurs, and individuals with significant financial commitments, it serves as a strong safeguard that ensures your family’s goals, such as home ownership, higher education, and comfortable living, remain secure even in your absence. Here’s why this plan makes practical sense:

• Budget-friendly premiums: A ₹5 crore cover offers high protection at an affordable cost. Since premiums are age-sensitive, purchasing early helps you lock in lower rates for the long term.

• Reliable financial safety net: The payout from a ₹5 crore policy can replace lost income, manage ongoing EMIs, pay for children’s education, and cover household expenses without affecting your family’s lifestyle or financial independence.

• Extensive long-term coverage: While a smaller sum may seem sufficient now, inflation and changing financial priorities can make it inadequate over time. A ₹5 crore cover keeps your family protected for decades, covering needs such as parents’ medical care or your children’s education abroad.

• Flexibility to grow wealth: Since term plans provide substantial coverage at low premiums, you can direct additional savings toward investments like mutual funds, real estate, or retirement schemes. Even in your absence, your family can continue these investments without disruption.

A ₹5 crore term insurance plan combines affordability, flexibility, and comprehensive protection, making it a smart financial decision for anyone with long-term goals and dependents to secure.

How Does a ₹5 Crore Term Insurance Plan Work?

A ₹5 crore term insurance plan works on a simple and transparent principle, providing your family with a large financial safety net in case of your untimely demise, at an affordable premium. Here’s how a 5 crore term insurance works:

• Step 1: Choose Your Coverage and Term
  The policyholder selects the coverage amount (₹5 crore), policy tenure (for instance, 25 or 30 years), and preferred premium payment frequency, monthly, quarterly, or annually.

• Step 2: Pay Fixed Premiums
  Once the plan is issued, the policyholder pays regular premiums throughout the chosen term. The premium remains fixed for the duration of the policy, ensuring long-term affordability and predictability.

• Step 3: Claim Payout in Case of Demise
  In the unfortunate event of the policyholder’s death during the policy term, the insurance company pays the entire ₹5 crore sum assured to the nominee. This amount is generally tax-free under prevailing laws.

This payout ensures that your family remains financially secure and can maintain their standard of living. It can help them manage home loan EMIs, children’s education, ongoing expenses, and future life goals.

Explain with the Help of an Example How a 5 Crore Term Insurance Works

Let’s understand this better through an example.

Consider Rohan, a 42-year-old non-smoker working professional from Mumbai. He lives with his spouse, two young children, and dependent parents. He also has a home loan of ₹80 lakh. To safeguard his family’s financial future, Rohan opts for a ₹5 crore term insurance plan with a 30-year tenure.

If Rohan were to pass away during the policy term, his nominee would receive the entire ₹5 crore as the death benefit. This amount would ensure that his family’s immediate needs, ongoing liabilities, and long-term aspirations are fully taken care of.

The table below illustrates how this ₹5 crore payout could be allocated to meet different family needs:

This simple example shows how a ₹5 crore term insurance policy can help your family meet both immediate and long-term financial needs, from debt repayment and education costs to healthcare and retirement.

What Are the Benefits of a ₹5 Crore Term Insurance Plan?

A ₹5 crore term insurance plan offers extensive financial protection for your family while also helping you save on taxes. It combines high coverage with long-term stability, ensuring peace of mind for you and your loved ones.

• Helps Maintain Lifestyle and Meet Long-Term Goals
  A ₹5 crore plan ensures your family can continue living comfortably and meet important milestones, even in your absence. The payout can be used to cover daily expenses, repay EMIs, or fund your child’s higher education and wedding.
  Example: When 35-year-old Rajeev, an IT professional, passes away suddenly, his family uses the ₹5 crore payout to manage EMIs, fund their daughter’s overseas education, and maintain their lifestyle without financial strain.

• Offers Tax Benefits
  Under Section 80C of the Income Tax Act, you can claim deductions of up to ₹1.5 lakh on premiums paid. Additionally, under Section 10(10D), the payout received by your nominee is exempt from tax. This makes a ₹5 crore term plan a smart financial choice that provides both protection and savings.

• Provides Financial Stability to Loved Ones
  A large coverage amount like ₹5 crore ensures your family remains financially independent and secure. It helps clear outstanding debts, supports future goals, and safeguards against unexpected financial stress.

What are the Key Features of a ₹5 Crore Term Insurance Plan?

A ₹5 crore term policy offers more than just high coverage. It provides flexibility, affordability, and customisation to meet diverse financial needs.

• High Coverage at Affordable Premiums
  Term plans offer significant coverage at relatively low costs. For instance, a 50-year-old non-smoker can get ₹5 crore coverage for about ₹21,649 per month for a 30-year term, making it accessible even for middle-income earners.

• Flexible Premium Payment Options
  You can choose how you want to pay your premiums—monthly, quarterly, annually, or through limited-pay options. Some insurers also allow single-pay plans for added convenience.

• Option to Add Riders
  You can enhance your base plan with riders such as accidental death benefit, critical illness cover, or waiver of premium. These add-ons strengthen your overall protection under a single policy.

• Flexible Claim Payout Options
  You can decide how your family receives the ₹5 crore payout—either as a lump sum, in monthly instalments, or as a combination of both. This ensures the funds are managed effectively over time.

• High Claim Settlement Ratio
  Choose insurers with a strong claim settlement record. For instance, HDFC Life has a claim settlement ratio of 99.68% (FY 2024–25), ensuring your family receives timely and reliable support.

How to Determine the Right Coverage Amount For Yourself?

A ₹5 crore term plan may not be suitable for everyone. Here’s how to evaluate whether it fits your financial needs:

• Assess Dependents’ Needs: Start by identifying how many family members rely on your income and estimate their monthly and long-term living expenses. This helps you determine how much financial protection your family would truly need in your absence.

• Factor in Your Age: Your age plays a major role in both the premium amount and policy duration. Buying term insurance at a younger age allows you to enjoy lower premiums and ensures coverage for a longer period.

• Check Annual Income: A good rule of thumb is to choose a sum assured that is around 10 to 15 times your annual income. This ensures that your family can sustain their lifestyle, meet ongoing expenses, and plan for future goals comfortably.

• Account for Inflation: As living costs continue to rise, your insurance cover should also keep pace. Opting for a higher coverage amount ensures your family’s lifestyle remains unaffected by inflation over time.

• Include Future Responsibilities: Think about long-term goals and responsibilities such as your children’s higher education, your parents’ medical care, or your spouse’s retirement needs. These factors help determine the right coverage amount.

• Add a Buffer for Emergencies: Life is unpredictable, and emergencies can arise without warning. Including an extra buffer in your coverage ensures that your family is financially prepared for medical, legal, or other unexpected expenses.

• Consider Existing Assets: If you already have investments or savings, you can factor them into your financial plan. However, make sure your insurance coverage still fills any remaining financial gaps for complete protection.

• Ensure Affordability: Use an online term insurance calculator to find a balance between the premium amount and the benefits offered. This helps you choose a plan that fits your current budget while securing your family’s financial future.

Is ₹5 Crore Term Insurance the Right Choice for You?

A ₹5 crore plan is ideal for individuals with high financial responsibilities or long-term goals. It provides comprehensive coverage for daily expenses, education costs, EMIs, and retirement needs.

Who is it right for?

• You are an earning member with dependents.

• You have large outstanding loans.

• You aim to protect your family from inflation and rising costs.

• You want long-term financial independence for your loved ones.

Fixed Premiums: Once purchased, the premium remains constant throughout the policy term, offering predictability and long-term savings.

Add-on Riders:
Enhance protection with optional riders:

• Critical Illness Rider – Provides a lump sum on diagnosis.

• Accidental Death Benefit – Offers extra payout for accidental death.

• Waiver of Premium – Future premiums are waived in case of disability or critical illness.

Will My Rs. 5 Crore Term Insurance Policy be Enough?

Choosing an appropriate plan needs a lot of planning and a better understanding of what is term insurance offering. A term insurance plan offers a scope of items to help accomplish your budgetary objectives assurance against vulnerabilities, taking care of obligations, the child’s educational needs, retirement, and so forth. You must recognize your necessities and choose a plan that can fulfill those requirements to the best. Also, keep in mind the future aspects like rising inflation, loan repayments, etc. while purchasing term insurance of 5 crore, remember that higher coverage will help your family deal with these aspects in the case of any eventuality. Thus, the future estimation of cash must be considered for computation while deciding Rs 10 crore life insurance policy cover.

Each person and family's needs are different. If your dependent is your life partner and has a kid, then, a Rs 5 crore term insurance cover, for the most part, will be adequate. On the other hand, if you wish to cover other members of your family, a bigger sum might be required. You should adopt an achievement-based strategy to purchase the right Rs 5 crore term insurance plan.

Who Should Buy a ₹5 Crore Term Insurance Plan?

What are the Factors to Consider Before Buying a ₹5 Crore Term Plan?

Here are the factors to consider before buying a 5 crore term insurance plan:

• Coverage Amount: Start by assessing your income, monthly expenses, outstanding liabilities, and the number of people financially dependent on you. This will help you determine whether a ₹5 crore cover is the right fit for your family’s financial needs.

• Policy Tenure: Choose a policy term that extends until your major financial responsibilities—such as your children’s education, loan repayments, or retirement planning—are fulfilled. This ensures your family remains protected throughout the most crucial stages of life.

• Premium Affordability: Compare premiums from different insurers to find a plan that offers comprehensive coverage without straining your budget. Always ensure the premium remains manageable over time, even as your financial priorities evolve.

• Claim Settlement Ratio: Always check the insurer’s claim settlement ratio (CSR) before purchasing. A CSR above 95% indicates that the company has a strong track record of honouring claims promptly and reliably.

• Riders: Strengthen your base plan by adding riders such as critical illness, accidental death benefit, or waiver of premium. These add-ons provide additional protection and make your plan more comprehensive.

• Documentation: Keep essential documents ready, including income proof, medical records, and valid ID documents. For high-value policies like ₹5 crore, insurers may also require a medical test or detailed financial verification.

• Exclusions: Review the policy exclusions carefully before purchasing. Common exclusions include death by suicide within the first policy year, self-inflicted injuries, or non-disclosure of medical conditions. Understanding these helps avoid claim disputes later.

• Claims Process: Opt for insurers that provide a quick, transparent, and simple claim settlement process. Ensure your nominee is aware of how to file a claim and the documents required, so they can access the payout without difficulty.

• Flexibility: Select a policy that allows you to increase coverage at different life stages, such as marriage, childbirth, or a rise in income. This flexibility helps your plan grow along with your financial responsibilities.

• Tax Benefits: Confirm that your plan qualifies for tax deductions under Section 80C for premiums paid and Section 10(10D) for the death benefit received. These benefits make your policy both financially protective and tax-efficient.

How to Choose the Best ₹5 Crore Term Insurance Plan?

Finding the best plan goes beyond high coverage. Focus on long-term suitability, affordability, and trustworthiness.

• Compare Premiums: Review and compare premium rates from different insurers to find a policy that offers the right balance between affordability and benefits. The goal is to secure strong financial protection without stretching your monthly budget.

• Check Claim Settlement Ratio: Always prefer insurers with a claim settlement ratio (CSR) above 95%. A higher CSR reflects the insurer’s reliability and consistency in settling claims, which ensures your family receives timely financial support when needed.

• Evaluate Riders: Explore add-on options such as critical illness, accidental death benefit, or waiver of premium, and select those that best suit your health profile, occupation, and lifestyle. These riders enhance your policy’s coverage and make it more well-rounded.

• Consider Entry Age: Purchasing a term insurance plan at a younger age helps you lock in lower premium rates for the entire duration of the policy. It also ensures longer coverage at a more cost-effective rate.

• Account for Dependents: Choose your coverage amount based on the number of dependents you have and their future financial goals. This ensures your family’s needs—such as education, daily expenses, and long-term plans—are adequately met even in your absence.

What is the Best Time to Buy 5 Crore Term Insurance?

Note: Check all the best term insurance plan in India.

Note: You should also check the benefits of term life insurance if you are planning to purchase the term insurance plan.

Documents Required to Buy a Rs. 5 Crore Term Insurance Plans 

Here is a list of documents which are required to buy a Rs. 5 crore term insurance plan:

• Income Proof
  Accepted documents include: Last 6 months’ bank statements with salary credit, Form 16, last 3 years’ ITR with Computation of Income (COI), or the latest 3 months’ salary slips along with 6 months’ bank statements showing salary credit.

• ID & Address Proof
  You can submit any of the following: Passport, Masked Aadhaar, Voter ID, or Driver’s License.

• Age Proof
  Any one of these is valid: Passport, Masked Aadhaar, Driver’s License, Birth Certificate, Baptism Certificate, or PAN Card.

• Additional Requirements
  These may include a recent passport-size photo, details of existing life insurance policies, and medical reports or a health declaration form.

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