Term Plans from 1 Crore to 10 Crore: How to Pick the Right Cover

Financial security for one’s family has become a top priority. Among various protection options, a term insurance plan stands out as a simple and affordable solution. It offers financial protection for a fixed period. The policyholder pays regular premiums, and if the life assured passes away during the policy term, the insurer pays a lump sum to the nominee. 

In recent years, term plans for ₹1 crore have become increasingly popular. This article will help you decide the right coverage amount for your needs. 

Why Term Insurance Coverage Amount Matters

Term insurance is designed to safeguard your dependents by replacing your income in the event of your death so they can meet living expenses, clear liabilities, and fulfil future goals. A recent study, ‘Underinsurance Survey 2025,’ was conducted by Bajaj Insurance in collaboration with NielsenIQ. It found that most Indians had life coverage amounting to just about 3.1 times their annual income.

It signals substantial underinsurance, which may leave families vulnerable. On the other hand, opting for a sum assured far beyond one’s actual financial exposure can result in unnecessarily high premium payments without proportionate benefit. 

The right coverage should consider your income, existing loans, future expenses, and the long-term impact of inflation. Let’s learn more about these in detail.  

Factors That Determine the Ideal Cover 

Now that you understand why the coverage amount matters, the next step is to calculate how much term insurance you actually need. The right cover is not a random figure, such as a ₹1 crore or ₹10 crore term insurance policy. Here are some steps to calculate the right coverage you may need:

1. Estimate Your Household Expenses

Assess your family’s essential monthly expenses, including housing, groceries, school fees, healthcare, and utilities. Multiply your annual expense by 10 to 15 times to get a base figure. For example, if your family spends ₹80,000 per month (₹9.6 lakh per year), a coverage of around ₹1-₹2 crore will be needed just to sustain regular living costs over the long term.

2. Add All Outstanding Liabilities

Include every loan (home, car, or personal) you are repaying. Your dependents shouldn’t be left to handle these obligations. For instance, if you have a housing loan of ₹55 lakh and a car loan of ₹8 lakh, your total liability of ₹63 lakh should be added to your term cover.

3. Account for Major Life Goals 

Children’s education, marriage, or dependent parents’ medical care are major financial goals. Estimate their future cost and add its inflation-adjusted figure to your coverage. For example, if higher education costs ₹25 lakh today, it will cost roughly ₹45–₹50 lakh in the next 12–15 years (assuming 6–7% annual inflation).

4. Provide For Your Spouse’s Retirement

If your spouse is financially dependent on you, secure their future beyond day-to-day expenses. Include a retirement corpus that can generate regular income and help them maintain their standard of living after working years. 

5. Deduct Existing Savings And Assets

Finally, subtract liquid investments such as mutual funds, provident funds, or deposits. For example, if you already have ₹30–₹40 lakh invested, it can offset part of your insurance cover. 

After adding and subtracting these figures, the ideal cover for most families in urban India can range from a term plan for ₹1 crore to ₹10 crore for complete protection. The aim is to keep your family financially secure, debt-free, and future-ready even in your absence.  

Other Considerations Before Buying a Term Plan for ₹1 Crore or More

When selecting between a ₹1 crore and a ₹10 crore term insurance, you should look beyond the coverage amount. The following points can help you make an informed choice.

1. Compare Premium Costs 

Evaluate the premium for different coverage amounts. A term plan for ₹1 crore will be less expensive, but as coverage increases to ₹5 crore or ₹10 crore, premiums will also rise. Use online premium calculators to compare plans and find what fits your budget.

2. Select an Appropriate Policy Term  

Opt for a term that matches your goals and your family’s dependency period. Longer terms will provide extended protection but come with higher premiums. Ideally, keep the term until liabilities such as children’s education or loans are cleared.  

3. Check Claim Settlement Ratio and Service Quality 

You should always select an insurer with a claim settlement ratio above 95% and a strong record for the quick processing of claims. Read customer reviews to gauge the reliability. 

4. Consider Customization Options 

Look for plans that allow for flexibility to add riders, such as those with critical illnesses or accidental deaths, or modify payout options. 

Conclusion

The ideal term insurance cover isn’t about picking a number like ₹1 crore or ₹10 crore. It should replace your income, clear all debts, and secure your family’s lifestyle in your absence. Review your income, liabilities, dependents’ expenses, and future goals before making a decision.