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While you face life's challenges head-on, the rising costs of living, including healthcare, education, and other expenses, can hamper your style of living. This is especially true when the family's breadwinner suddenly passes away, leaving the dependents behind to take care of all debts and maintain their lifestyle.
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A financial safeguard is necessary for those earning ₹ 20 lakh because your family's stability depends on you. Term insurance provides comfort and security, ensuring that your loved ones will be able to handle their finances much better.
Let's understand how term insurance works and how to choose the right policy for someone earning over ₹20 lakh.
Term Plans
With an average salary of around ₹18,000 per month in Andhra Pradesh, a ₹20 lakh income places you in a comfortable financial position but also brings added responsibilities. In the unfortunate event of an untimely death, a term insurance plan in Andhra Pradesh can relieve your family from financial strain. Here’s why it’s worth considering:
Financial Security - Earning ₹20 lakh likely means handling financial commitments such as mortgages, children’s education fees, and other family expenses. Term insurance offers a payout to your family that can cover these costs and maintain their standard of living.
Affordability - Term insurance plans offer significant coverage for a low premium. For instance, with a monthly premium starting around ₹485, you can secure ₹1 crore coverage, providing substantial protection without breaking the bank.
Comprehensive Coverage - Many term policies allow you to add riders, like coverage for critical illnesses or accidental death. Customising your plan with these additional options ensures your family is better protected against unexpected costs.
Peace of Mind - In India, among those who have life insurance, only 38% have sufficient insurance that can offer true family protection. A term insurance policy provides your family with financial assurance, so they’ll be taken care of even if life takes an unexpected turn.
Tax Savings - Premium payments for term insurance are eligible for deductions under Section 80C of the Income Tax Act, reducing your taxable income while safeguarding your family’s future.
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Many insurance providers in India offer tailor-made term insurance policies in Andhra Pradesh. If you are earning ₹20 lakh and looking for a term insurance plan to optimise your financial planning, here are some of the options:
| 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.
A general rule of thumb is to have coverage equal to 10–15 times your annual income. For someone earning ₹20 lakh, this suggests a coverage amount ranging from ₹2 crore to ₹3 crore. Here’s how to assess your ideal coverage:
Income Multiplier - Securing a payout 10–15 times your income provides a financial cushion for your family's ongoing and future needs.
Liabilities - Take into account any outstanding debts. Having a coverage amount that includes these obligations prevents your family from inheriting financial burdens.
Future Expenses - Consider upcoming expenses, such as children’s education, marriage, and healthcare needs. Having enough coverage ensures these long-term needs are met even if you’re not around.
Inflation - Costs will likely rise over time due to inflation. Choosing a sum assured with inflation can help ensure that the policy’s value remains sufficient for your family’s needs.
Claim Settlement Ratio (CSR) - A high CSR (above 95%) indicates that the insurer is reliable in processing claims. This ensures that your family won’t face unnecessary challenges when they need financial support.
Premium Affordability - Premiums vary across insurers. For coverage in the range of ₹2 crore to ₹3 crore, annual premiums typically range between ₹12,400 and ₹17,200. Compare options to find a policy that fits your budget.
Optional Riders for Enhanced Coverage - Riders offer additional protection. Some common riders include:
Accidental Death Benefit: Extra payout if death occurs due to an accident.
Critical Illness Rider: A lump sum payout upon diagnosis of a severe illness.
Waiver of Premium Rider: Future premiums are waived in case of a critical illness or permanent disability.
Policy Term - Select a term that aligns with your long-term financial obligations. If you’re young, a policy term of 20–30 years may be beneficial, covering you until debts are paid or dependents become financially independent.
Reputation of Insurer - It’s crucial to select an insurer with a good track record in customer service, efficient claim processing, and ease of policy renewal.
Following are the steps to purchase term life insurance for individuals making ₹ 20 lakhs in the state of Andhra Pradesh:
Step 1: Go to the term insurance page of Policybazaar.
Step 2: Fill in the personal details like name, gender, and contact details.
Step 3: You will be asked to share details about occupation types, annual income, level of education, smoking habits and current city.
Step 4: Find the most appropriate term life insurance policy and proceed to pay.
For individuals in Andhra Pradesh with an annual income of ₹20 lakh, buyingin term insurance is a wise choice for securing your family's financial future. Choose coverage that matches your income, debt obligations, and future expenses. Opt for a trusted insurer with a high claim settlement ratio and consider any additional riders to bolster your policy. By choosing term insurance now, you're creating a financial safety net to support your loved ones if life takes an unexpected turn.
†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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