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Living costs, healthcare expenses, and education costs are rising in Andhra Pradesh. Financial security has become the need of the hour. In case you earn more than ₹14 lakh, you can rest knowing that your family would be secured against an unfortunate incident like death, and term insurance can be that safety net that will provide them with the financial backup they would need in such times.
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This guide will cover how term insurance works, why high-earners must have it in Andhra Pradesh, and how to get the best policy so your family's financial well-being remains safe.
Term Plans
In Andhra Pradesh, where the typical monthly salary is around ₹18,000, earning ₹14 lakh annually puts in a higher income bracket. However, it also means you are responsible for protecting your family and ensuring they don't face financial difficulties after an unfortunate event. A term insurance policy can serve as a safety net for your family in the event of your untimely death. Here's why it is essential:
Financial Protection - With an income of ₹14 lakh, you likely have financial commitments like home loans or education fees for your children. A term insurance plan ensures your family has the financial support to manage these expenses in your absence through a guaranteed lump sum payout.
Affordable Premiums - Term insurance offers extensive coverage at a low cost. With premiums starting as low as ₹485 per month, you can secure your family's future without stressing your finances.
Comprehensive Coverage - Term insurance offers flexibility to address various needs, from paying off debts to adding extra riders for accidents or critical illnesses. You can customize the policy to fit your specific requirements.
Peace of Mind - Although the Indian insurance sector is growing, life insurance penetration is only at 3.2%, mainly because of limited awareness. If your income supports your household, this coverage assures your family's needs will be met.
Tax Benefits - Additionally, term insurance premiums are eligible for tax deductions under Section 80C of the Income Tax Act. This allows you to lower your taxable income while ensuring your family’s financial security.
Several life insurance providers in India offer customisable term plans tailored to individuals in Andhra Pradesh. Some of the term insurance options available for those earning 14 lakhs in Andhra Pradesh are:
| Insurance Provider | Term Insurance Plans | Claim Settlement Ratio | Entry Age | Maturity Age |
| ICICI Prudential Life Insurance Company Limited | iProtect Smart | 99.2% | 18 - 65 years | 99 years |
| HDFC Life Insurance Company Limited | Click 2 Protect Super | 99.5% | 18 - 65 years | 85 years |
| MaxAX Life Insurance Company Limited | Smart Total Elite Protection | 99.7% | 18 - 65 years | 85 years |
| TataATA AIA Life Insurance Company Limited | Sampoorna Raksha Promise | 99.1% | 18 - 65 years | 100 years |
| Bajaj Allianz Life Insurance Company Limited | Life eTouch | 99.2% | 18 - 55 years | 99 years |
* You can use the term insurance premium calculator to check the premiums applicable for your desired life cover.
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As a general guideline, your term insurance coverage should be 10-15 times your annual income if you earn ₹14 lakh. Here's how to determine the right coverage:
Income Multiplier: For an individual with an annual income of ₹14 lakh, the recommended coverage ranges from ₹1.4 crore to ₹2.1 crore. This ensures your family can maintain their current lifestyle and meet future financial goals.
Outstanding Debts: Ensure your coverage can also handle liabilities such as home loans, car loans, or any other debts your family may need to settle.
Future Costs: Consider long-term expenses like your children’s education, healthcare for elderly members, or wedding expenses when selecting coverage.
Impact of Inflation: Over time, inflation reduces the purchasing power of money. While a sum assured might seem sufficient now, ensure it's enough to meet future rising costs. For someone earning ₹14 lakh, a coverage of ₹1.4 crore to ₹2.1 crore offers better protection over the years.
Claim Settlement Ratio (CSR): Opt for insurers with a high claim settlement ratio to ensure your family experiences minimal hassle when claiming their benefits. Look for companies with a 95% or higher CSR to guarantee smooth claim processing.
Premium Affordability: Premiums can vary significantly between insurers. It's essential to select a provider that offers premiums within your budget. For an individual earning ₹14 lakh in Andhra Pradesh, annual premiums for coverage between ₹1.4 crore and ₹2.1 crore typically range from ₹9800 to ₹12,900. Be sure to compare premiums across different insurers to find the best option.
Riders: Enhance your policy with additional riders for extra protection. Consider these options:
Accidental Death Benefit Rider: This rider provides an extra payout if death occurs due to an accident.
Critical Illness Rider: This offers a lump sum payment if you're diagnosed with a critical illness such as cancer or a heart condition.
Waiver of Premium Rider: If you experience total disability or a critical illness, this rider waives future premium payments.
Policy Term: Choose a term that aligns with your financial responsibilities. If you're younger, consider a longer policy term of 20 to 30 years to ensure coverage lasts until your children are independent and your debts are settled.
Insurer Reputation: Select a reputable insurance provider focusing on customer support, claim processing, and ease of policy renewal. A reliable insurer can make a significant difference in your overall experience.
Here are the steps to purchase term life insurance for individuals earning 14 lakh in Andhra Pradesh:
Step 1: Visit the term insurance page on Policybazaar.
Step 2: Complete the personal information form by entering your name, gender, and contact details.
Step 3: Provide additional information regarding your occupation, annual income, educational background, smoking habits, and current city.
Step 4: Explore the available term life insurance policies, select the one that best suits your needs, and then pay.
In Andhra Pradesh, individuals with an annual income of 14 lakhs should prioritise term insurance to protect their family's future. Selecting the right coverage involves assessing existing liabilities, income, and anticipated financial requirements. Choosing a reputable insurer that boasts a high claim settlement ratio (CSR) and provides affordable premiums alongside various optional add-ons is crucial. Always opt for a term insurance plan that aligns with your family's needs and financial situation to ensure comprehensive protection.
†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
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