2 Crore Term Insurance Plans

A 2-crore term insurance policy offers high life cover at low premiums. Know its benefits, features, and how it ensures financial security for your family.
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3 min
10-April-2025

In today's fast-paced world, financial security is a primary concern for many families. With the rising cost of living and unforeseen circumstances, having a robust financial plan is crucial. One significant component of such a plan is term insurance. Specifically, a 2 crore term insurance plan can provide substantial security for your loved ones. This amount offers a robust financial shield to cover major expenses such as housing loans, children's education, and everyday living costs, providing a buffer against financial hardships. This article delves into what a 2 crore term insurance plan is, its significance, benefits, and tips on choosing the best plan for you.

What is a 2 crore term insurance plan?

A 2 crore term insurance plan is a type of life insurance policy with a coverage amount of Rs. 2 crore. This plan ensures that if the policyholder dies within the policy term, their beneficiaries will receive Rs. 2 crore. This lump sum amount can be used to cover daily expenses, pay off debts, fund children's education, or any other financial needs.

The premiums for such plans are generally affordable, especially when taken at a younger age. The exact premium can vary based on several factors, including the policyholder's age, health, lifestyle, and the insurer's terms.

How does a 2 crore term insurance plan work?

A 2 crore term insurance plan functions similarly to other term insurance plans but with a higher sum assured. Here’s a step-by-step breakdown of how it works:

  • Application and approval: You apply for a 2-crore life insurance and undergo medical tests and assessments. Based on the evaluation, the insurer decides the premium amount.
  • Policy issuance: Once approved, your 2-crore life insurance policy will be issued. You start paying premiums as per the chosen payment frequency (monthly, quarterly, annually).
  • Coverage period: The policy remains active for the selected term (e.g., 20, 30 years), provided premiums are paid regularly.
  • Claim process: In case of the policyholder’s death during the term, the beneficiaries file a claim with the insurance company. Upon verification, the insurer pays the sum assured (Rs. 2 crore) to the beneficiaries.
  • Policy expiry: If the policyholder survives the term, the policy expires without any payout. Some plans offer return of premium, but these come at higher premiums.

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Why should you buy a 2-crore term insurance plan?

Here are compelling reasons to consider a 2 crore term insurance plan:

  • Financial security for family: A 2 crore term insurance plan ensures that your family’s financial needs are met even in your absence. The substantial coverage amount can cover living expenses, educational costs, and outstanding debts, ensuring a comfortable life for your loved ones.
  • Affordable premiums: Compared to other types of life insurance policies, term insurance offers higher coverage at lower premiums. This makes a 2 crore term insurance plan an economical choice for securing a significant amount of coverage without straining your finances.
  • Peace of mind: Knowing that your family will be financially secure can bring immense peace of mind. A 2 crore term insurance policy ensures that your loved ones will not face financial difficulties in the event of your untimely demise.
  • Flexible tenure options: Term insurance plans offer flexible tenure options, allowing you to choose a policy term that aligns with your financial goals and responsibilities. This ensures that the coverage lasts for the duration you deem necessary.
  • Tax benefits: Premiums paid towards a 2 crore term insurance plan are eligible for tax deductions under Section 80C of the Income Tax Act. Additionally, the death cover received by the beneficiaries is tax-free under Section 10(10D).
  • Simple and transparent: Term insurance policies are straightforward, with no hidden charges or complex investment components. This simplicity ensures transparency and makes it easy for policyholders to understand their coverage.

Why do you need a 2 crore term insurance plan?

Know why you need a 2-crore life insurance plan:

  • High financial responsibilities: If you have significant financial responsibilities such as a home loan, children’s education, or other debts, a 2 crore term insurance plan can ensure that these obligations are met without burdening your family.
  • Inflation protection: With rising inflation, the value of money decreases over time. A higher coverage amount like 2-crore life insurance ensures that your family’s financial needs are adequately met, even years into the future.
  • Dependents’ security: If you are the primary breadwinner, your family depends on your income for their daily needs. A 2 crore term insurance plan ensures that their standard of living is maintained in your absence.
  • Cost of living: The cost of living is constantly increasing. A 2 crore term insurance policy can provide a substantial corpus to cover future expenses, ensuring that your family does not face financial hardships.
  • Financial planning: A term insurance plan is a crucial component of a comprehensive financial plan. It acts as a safety net, allowing you to plan for other financial goals without worrying about the future security of your loved ones.

Benefits of a 2 crore term insurance plan

Following are the advantages of opting a 2 crore term insurance plan:

  • Substantial coverage: A 2 crore term insurance plan provides a significant amount of coverage, ensuring that your family’s financial needs are met comprehensively.
  • Low premiums: Term insurance plans offer high coverage at relatively low premiums, making them an affordable option for securing your family’s future.
  • Death cover: In the unfortunate event of the policyholder’s demise, the beneficiaries receive a lump sum payout, ensuring financial stability during a difficult time.
  • Flexibility: Policyholders can choose the policy term and premium payment frequency as per their convenience, offering flexibility in managing the insurance plan.
  • Riders for enhanced protection: Many term insurance plans offer riders such as critical illness cover, accidental death cover, and waiver of premium, enhancing the policy’s coverage.
  • Tax benefits: Premiums paid towards the policy are eligible for tax deductions under Section 80C, and the death benefit is tax-free under Section 10(10D).
  • Peace of mind: Knowing that your family’s financial future is secure brings peace of mind, allowing you to focus on other aspects of life without worry.
  • Simplicity: Term insurance policies are straightforward, with no investment component, making them easy to understand and manage.

Key factors to consider before choosing the most suitable Rs. 2 crore term insurance plan

Before buying the term insurance plan for 2 crore, it is essential to evaluate a few important factors to make an informed decision. This helps ensure the plan matches your financial needs and future goals.

Important points to keep in mind:

  • Compare premium rates from multiple insurers:
    Before selecting a Rs. 2 crore term insurance plan, it’s smart to compare premium rates offered by different insurers. This helps you find the most affordable option for the coverage you need. Premiums can vary significantly between companies, so checking online quotes or using comparison tools ensures you don’t end up overpaying for the same benefits.
  • Check claim settlement ratio of the insurer:
    The claim settlement ratio shows how many claims an insurance company has settled compared to the claims it received. A high ratio means the insurer is reliable and likely to settle your family's claim without hassles. Always pick a company with a consistent claim settlement ratio above 95% when buying a 2-crore term insurance policy.
  • Consider policy term based on your retirement age:
    Your policy term should align with your financial responsibilities and when you plan to retire. If you plan to retire at 60, choose a term that covers you at least till then or a little beyond. A 2-crore term insurance policy should provide cover during your working years and until your key financial commitments are met. This way, your family stays protected throughout your earning years and until you’ve fulfilled your major financial goals.
  • Evaluate riders and additional benefits:
    Riders like critical illness cover, accidental death benefit, or waiver of premium add more protection to your term plan. These optional benefits might cost a bit extra but can be very useful in emergencies. Always check what riders are offered and see which ones match your lifestyle and health needs before finalising the plan.
  • Ensure sum assured covers your long-term obligations:
    The Rs. 2 crore term insurance sum assured should be enough to take care of your family’s financial needs, like children’s education, outstanding loans, and daily expenses, in your absence. Calculate your liabilities and future goals before choosing the cover. This helps make sure your family doesn’t struggle financially if you’re not around.
  • Choose insurers with good customer support:
    Having an insurer that offers helpful and responsive customer service is a big plus. Whether it’s to get help with policy details, file a claim, or make changes, prompt and friendly support makes a huge difference. Look at customer reviews or talk to others before selecting an insurer known for smooth service.
  • Look for flexible premium payment options:
    Check if the insurer offers flexible premium payment frequencies – like monthly, quarterly, half-yearly, or yearly. This allows you to pick a payment schedule that fits your budget and income cycle. Some plans also allow limited payment terms where you pay for a few years but stay covered for longer.
  • Assess the solvency ratio of the insurer:
    The solvency ratio shows the insurer’s financial health and ability to pay claims. It’s a key indicator of the company’s long-term stability. A solvency ratio above 1.5 is considered strong. Always choose an insurer with a healthy solvency ratio to ensure they can honour claims when needed.

How to choose a suitable term insurance plan of 2 crore?

Here are some tips how you can choose the most suitable 2 crore term insurance plan:

  • Assess your needs: Evaluate your family’s financial needs, future goals, and liabilities to determine the adequate coverage amount
  • Compare plans: Use a 2 crore term insurance premium calculator to compare different plans and their premiums. Choose the one that offers the best value for money.
  • Check insurer’s reputation: Opt for an insurance company with a high claim settlement ratio and good customer reviews for buying a 2-crore life insurance policy.
  • Add riders: Consider adding riders like critical illness, accidental death, anddisability to enhance your 2 crore life insurance for full protection.
  • Understand the policy terms: Read the fine print carefully to understand the inclusions, exclusions, and conditions of the policy.
  • Consult a financial advisor: Seek advice from a financial advisor to make an informed decision based on your specific needs and financial situation.

How to assess the suitable cover for a Rs. 2 crore term plan?

Understanding how much coverage you actually need helps avoid both underinsurance and over-insurance. Here is how to determine the right sum assured for your 2 crore life insurance policy.

Tips to decide the right coverage amount

  • Multiply your annual income by 10–15 times
  • Add future goals like children’s education or marriage
  • Include existing loans and liabilities
  • Factor in inflation over the policy term
  • Estimate your family’s living expenses for future
  • Consider spouse’s income and other savings
  • Review employer-provided insurance, if any
  • Seek expert financial advice if unsure

Is Rs. 2 crore the right coverage amount for a term insurance plan?

Choosing the right sum assured is critical when purchasing a term insurance policy. Here’s how you can assess whether 2 crore term insurance is suitable for your needs:

  • Dependent family members and living expenses:
    Evaluate how many family members depend on you financially—spouse, children, elderly parents—and what their monthly and yearly expenses are. A 2-crore term insurance policy can provide financial stability for your loved ones in your absence. It ensures they can maintain their standard of living, cover education costs, healthcare needs, and day-to-day expenses. This is especially crucial if you're the sole breadwinner and want to leave behind a meaningful financial cushion through a 2-crore life insurance plan.
  • Understand your financial liabilities:
    Outstanding debts such as a home loan, personal loan, or education loan should be factored into your insurance coverage. A term insurance 2 crore plan is often sufficient to take care of these liabilities without burdening your family. Your 2-crore life insurance policy should cover all debts to ensure your family is not left struggling to repay them. This financial shield helps maintain your family’s stability, even in the most challenging times.
  • Your annual income and retirement:
    A common guideline is to have a life cover that’s 10 to 20 times your annual income. If you earn around ₹10–₹15 lakhs per year, then a 2 crore life insurance policy can be a wise choice. It ensures that your family’s financial needs are taken care of until your planned retirement age or longer. This makes 2 crore term insurance a strong pillar in your long-term financial planning and protection strategy.
  • Human Life Value (HLV)
    Human Life Value (HLV) refers to the present value of your future income, savings, and other economic contributions. Calculating your HLV helps determine how much life cover you truly need. A 2-crore life insurance policy might be ideal if your HLV estimation aligns with it. This ensures your family receives a justifiable replacement for your income, making term insurance 2 crore a thoughtful and data-driven decision.
  • Account for inflation:
    The cost of living will continue to rise due to inflation, which can reduce the real value of your insurance payout over time. A 2-crore term insurance plan today might seem more than enough, but in 20–30 years, its value could significantly drop. Choosing a 2-crore life insurance policy gives you a decent buffer against future price hikes and helps maintain your family’s lifestyle in your absence.

Ideal time to purchase a Rs. 2 crore term insurance plan

Timing is everything when it comes to buying a 2 crore term insurance policy. The earlier you purchase it in life—ideally in your 20s or early 30s—the more affordable your premium will be. Younger individuals are considered lower risk by insurers, which results in better coverage options, longer policy terms, and lower premiums. Buying early also ensures financial protection for a longer period, giving your family peace of mind. It’s a smart decision that grows with your responsibilities, making it cost-effective and future-ready.

Term insurance premium illustration by age for Rs. 2 crore cover

Age at Purchase

Approx. Annual Premium*

Policy Term

Health Condition

Coverage Benefits

25 years

Rs. 10,000 – Rs. 12,000

40 years

Excellent

High sum assured, low premium

30 years

Rs. 12,000 – Rs. 15,000

35 years

Good

Balanced premium, wide options

35 years

Rs. 16,000 – Rs. 20,000

30 years

Moderate

Higher premium, moderate coverage options

40 years

Rs. 22,000 – Rs. 28,000

25 years

Average

Limited term, higher premium

*Premium rates vary based on insurer, health, lifestyle, and add-on riders.

Elements that affect the premium of a Rs. 2 crore term policy

When opting for a 2 crore term insurance plan, it's important to understand what drives the premium you pay. Several personal and policy-related factors influence the cost.

Here's a breakdown of key factors impacting premium:

  • Age of the policyholder:
    Your age at the time of purchasing the term insurance 2 crore plan significantly affects the premium. Younger individuals are considered lower risk and are likely to pay a lower premium compared to older applicants.
  • Medical history and current health:
    Pre-existing conditions like diabetes, hypertension, or heart issues can raise your premium. Insurers assess your health risk before offering a 2 crore life insurance policy, and healthier individuals get better rates.
  • Lifestyle habits:
    Smoking, alcohol consumption, or hazardous hobbies like adventure sports increase the risk factor, which leads to higher premiums. A clean lifestyle helps you get more affordable 2 crore term insurance coverage.
  • Policy term and coverage amount:
    A longer policy term or higher sum assured, such as term insurance 2 crore, naturally increases the premium. However, the cost is still reasonable compared to the protection it provides.
  • Occupation and work environment:
    Riskier jobs—such as construction or mining—might attract higher premiums. Safer professions generally lead to more favourable pricing on a 2 crore life insurance policy.
  • Add-on riders:
    Adding riders like critical illness cover, accidental death benefit, or waiver of premium increases your premium. However, these additions enhance the value of your 2 crore term insurance plan.
  • Gender:
    Statistically, women tend to live longer than men, which may result in slightly lower premiums for females under similar policy conditions.

Understanding these factors helps you choose the right 2 crore life insurance policy that balances affordability with complete protection.

Understanding premium calculation for term insurance

Premiums for 2 crore life insurance policies are not fixed and vary from person to person. Insurers evaluate multiple factors like age, health, lifestyle habits, and policy specifics. When calculating premiums for term insurance 2 crore, they also consider the tenure of the plan and the sum assured. These elements help determine how much you need to pay annually or monthly to keep your 2 crore life insurance active and ensure adequate financial security for your loved ones.

  • Plan tenure
    The duration of your term insurance 2 crore plan significantly influences your premium. Longer tenures, like 30 or 40 years, typically have higher cumulative premiums because the insurer covers you for a longer period. However, the per-year premium may still be affordable, especially when purchased at a younger age. A wisely selected tenure ensures your 2 crore life insurance policy supports your dependents through key financial milestones like children’s education or loan repayment.
  • Sum assured
    The higher the sum assured, the higher the premium—because the insurer’s risk increases. For a 2 crore life insurance policy, premiums are higher than for lower coverage amounts, but the cost is justified by the comprehensive protection it provides. Choosing term insurance 2 crore ensures your family’s financial needs are covered even in your absence, offering peace of mind against rising costs, inflation, and long-term liabilities like home loans or retirement planning.

How insurers determine your premium:

  • Age and gender
  • Medical history and current health status
  • Sum assured amount
  • Policy duration and premium frequency
  • Lifestyle habits like smoking

Process of making a claim under a Rs. 2 crore term plan

Filing a claim under the term insurance plan for 2 crore requires following certain steps to ensure a smooth settlement process.

Claim procedure overview:

  • Notify the insurer about the policyholder’s death
  • Submit the filled claim form and death certificate
  • Provide policy documents and ID proofs
  • Complete any medical or legal documentation
  • Insurer processes and settles the claim after verification

Tax savings on a Rs. 2 crore term insurance policy

Opting for the term insurance plan for 2 crore not only secures your family but also offers tax benefits under Indian tax laws.

Tax advantages of term plans:

  • Premiums are deductible under Section 80C (up to Rs. 1.5 lakh/year)
  • Death covers are tax-free under Section 10(10D)
  • Riders like critical illness may offer additional deductions
  • Helps reduce overall taxable income

Useful add-ons for your Rs. 2 crore term plan

Enhancing your 2 crore term insurance with the right riders increases your coverage in critical situations.

Recommended riders to consider:

  • Accidental death cover rider
  • Critical illness rider
  • Waiver of premium rider
  • Permanent disability benefit rider
  • Income benefit rider for regular payouts

Conclusion

A 2 crore term insurance plan is an excellent way to secure your family’s financial future and provide peace of mind. It offers high coverage at an affordable cost, ensuring that your loved ones are protected from financial hardships in your absence. By understanding the features, benefits, and working of a 2 crore term insurance plan, you can make an informed decision that best suits your needs. Remember to assess your requirements, compare plans, and choose a reputable insurer to ensure comprehensive coverage and a hassle-free claim process.

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Frequently asked questions

Is getting 2 crore term insurance worth it?
Yes, getting a 2 crore term insurance is worth it for individuals with significant financial responsibilities and dependents. It provides substantial coverage at affordable premiums, ensuring that your family is financially secure in case of your untimely demise, covering major expenses and future needs.
What is the income requirement for 2 crore term insurance?
The income requirement for a 1 crore term insurance varies among insurers, but generally, individuals should have an annual income of at least Rs. 5-6 lakh. This ensures that the policyholder can afford the premiums and justifies the need for such high coverage.
Can an individual get two term insurance?
Yes, an individual can get multiple term insurance policies from different insurers. This strategy can be used to increase the total coverage amount or to align different policies with various financial goals and responsibilities, ensuring comprehensive financial protection for dependents.
Are payouts from the most suitable Rs. 2 crore term insurance plan taxable?

No, the payouts received from the best term insurance plan for 2 crore are not taxable under Section 10(10D) of the Income Tax Act, provided the policy complies with prescribed conditions. The death benefit is fully exempt from tax in the hands of the nominee.

What is the process to buy a Rs. 2 crore term insurance plan online?

To buy a 2 crore term insurance online, visit the insurer’s website, compare plans, fill in personal and medical details, choose riders, and submit documents. Complete the payment online. A medical test may be required before final approval of the policy.

What if I forget to pay my premium for the Rs. 2 crore policy?

If you miss a premium for your 2 crore term insurance, you typically get a grace period (15–30 days) to pay. If not paid within this window, the policy lapses. Some insurers allow revival within a few years, subject to terms and health assessment.

Is it possible to enhance the cover later in a Rs. 2 crore term plan?

Yes, some insurers allow increasing the cover in a 2 crore term insurance plan during life milestones like marriage, childbirth, or income rise. This feature is known as life stage benefit. Alternatively, you can purchase a new policy to supplement existing coverage.

What paperwork is needed to purchase a Rs. 2 crore term insurance policy?

To buy a Rs. 2 crore term insurance policy, you’ll need documents like identity proof, address proof, income proof (like salary slips or ITR), and recent medical records if required by the insurer.

Can I include extra benefits with my Rs. 2 crore term plan?

Yes, you can enhance your Rs. 2 crore term insurance plan by adding riders such as critical illness, accidental death, or waiver of premium, based on your insurer’s offerings and your personal coverage needs.

Is the claim process more difficult for a Rs. 2 crore term plan?

No, the claim process remains similar regardless of the coverage amount. However, insurers may conduct more thorough verification for high-value claims like Rs. 2 crore to ensure everything is in order before settlement.

Do I need to undergo a medical test for a Rs. 2 crore term plan?

Yes, medical tests are usually mandatory for a Rs. 2 crore term insurance policy. It helps insurers assess your health risk and determine eligibility and premiums accurately for such a high sum assured.

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*T&C Apply - Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Future Generali Life Insurance Company Limited, Life Insurance Corporation of India (LIC), Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Company Limited, HDFC ERGO General Insurance Company, TATA AIG General Insurance Company Limited, ICICI Lombard General Insurance Company Limited, New India Assurance Limited, Chola MS General Insurance Company Limited, Zurich Kotak General Insurance Company Limited , Star Health & Allied Insurance Company Limited, Care Health Insurance Company Limited, Niva Bupa Health Insurance Company Limited, Aditya Birla Health Insurance Company Limited and Manipal Cigna Health Insurance Company Limited under the IRDAI composite CA registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. Please refer insurer's website for Policy Wordings. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure carefully before concluding a sale. Tax benefits applicable if any, will be as per the prevailing tax laws. Tax laws are subject to change. BFL does NOT provide Tax/Investment advisory services. Please consult your advisors before proceeding to purchase an insurance product. Visitors are hereby informed that their information submitted on the website may also be shared with insurers. BFL is also a distributor of other third-party products from Assistance Services providers such as CPP Assistance Services Pvt. Ltd., Bajaj Finserv Health Ltd. etc. All product information such as premium, benefits, exclusions, sum insured, value added services, etc. are authentic and solely based on the information received from the respective insurance company or the respective Assistance service provider company.

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