Eligible for low Sum Assured? Here’s how to get a higher sum assured on your insurance policy!

Life can be unpredictable. Consider a world in which your absence does not result in financial hardship for your loved ones. Life insurance is an effective way to accomplish this goal. It provides a guaranteed payment (sum assured), which is the payout your beneficiaries will get if you unfortunately pass away during the policy's term. This financial safety net ensures their well-being and allows them to handle financial difficulties without stress.

However, the predetermined sum assured offered by term life insurance providers may not always be adequate. There may be occasions where eligibility terms of the insurance companies prevent you from getting the appropriate coverage amount. This is where the concept of increasing your life insurance sum assured comes into play. After all, a higher sum assured provides more comprehensive financial security for your dependents. In this article, we will look at numerous ways for improving your eligibility.

Understanding Sum Assured and its Significance

The sum assured is the guaranteed amount your beneficiaries will receive if you, unfortunately, die within the policy's term. It is a crucial factor in determining the extent of financial protection your loved ones will receive. Here's why a higher sum assured is frequently preferred:

Combat Inflation: Inflation causes the cost of living to increase continuously over time. A higher sum assured today assures that your beneficiaries have enough to sustain their desired lifestyle in the future, even if the value of money falls.

Fulfill Financial Goals: Perhaps you envision your children having excellent schooling or your spouse retiring comfortably. A bigger sum assured gives the financial cushion required to attain these goals and empowers your family to follow their dreams.

Eliminate Debt Burdens: Outstanding debts, such as loans or student loans, can place a considerable load on your family. A significant sum assured ensures that these obligations are settled quickly, leaving your loved ones debt-free and with a new financial start.

Maintain Living expenditures: The sum assured should be sufficient to meet your dependents' basic living expenses for a specified time period. This gives individuals time to adjust financially and make informed decisions about their future without being under financial strain.

Factors Affecting Eligibility for Higher Sum Assured

Term life insurance companies consider a variety of factors before assessing if you are eligible for a given sum such as the 1 crore term insurance you have asked for. Here are the main considerations:

Age: Younger applicants typically qualify for a higher sum assured due to a longer life expectancy, resulting in a lesser risk for the insurer.

Health: Pre-existing medical issues or a high-risk lifestyle (smoking, substance abuse) may limit your eligibility for a large sum assured like 1 crore term insurance or the insurance company may increase your premiums.

Income: A higher income reflects your ability to pay higher premiums, potentially leading to a large sum assured.

Occupation: Certain risky careers may limit your eligibility for a large sum assured.

Policy Type: Term life insurance generally offers a bigger sum assured at lower premiums for 1 crore term insurance than whole life insurance, which provides extra benefits but has a lower death benefit.

Strategies to Increase Your Eligibility for a Higher Sum Assured

While these factors determine eligibility, there are ways to increase your chances of receiving a larger sum assured:

Maintain a Healthy Lifestyle: A healthy lifestyle that includes regular exercise, a balanced diet, and no smoking or excessive alcohol lowers your health risk, perhaps resulting in a higher sum assured and reduced premiums.

Manage Your Weight: Obesity is a significant health concern. Maintaining a healthy weight can help you qualify for a higher sum assured.

Address Pre-existing Medical Conditions: If you have a pre-existing medical problem, take adequate medication and live a healthy lifestyle. Stable, well-controlled conditions may not have a substantial impact on eligibility.

Select the Right Policy Type: Term life insurance of 1 crore term insurance provides the maximum sum assured for your premium. Consider your needs and select an insurance with a high death benefit if that is your primary goal.

Spread the Risk with Joint Life Insurance: Consider getting a joint term life insurance with your spouse. This policy pays out on the first death, although the total sum assured is frequently higher than what a single policy of 1 crore term insurance could provide. However, both individuals must meet the eligibility requirements for coverage.

Increase Your Income: While a higher income does not ensure a higher sum, it does reflect your ability to pay higher premiums, thus qualifying you for more coverage.

Financial Planning for a Larger Sum Assured

Aside from lifestyle modifications, here are some financial planning ideas to help you achieve a higher sum assured:

Term Riders: Consider including riders in your term life insurance policy. Riders, like as critical sickness or accidental death benefit riders, give additional payouts for specific conditions and can substantially raise the overall payout while not substantially raising your premium.

Increase Coverage Over Time: As your income increases, think about gradually increasing your sum assured. Many policies allow for an increase in coverage without requiring a comprehensive medical re-evaluation if done within the certain time period.

Invest alongside insurance: While life insurance offers a death benefit, you should also consider investing to establish wealth that will supplement the sum assured and meet your dependents' long-term financial needs.

At last,

Life insurance is more than just a financial product; it is an investment in the future well-being of your loved ones. By increasing your sum assured, you are effectively shielding them from the harsh realities of life without you. One final piece of advice: don't procrastinate. Life is unpredictable, and purchasing a life insurance policy with a maximum sum assured today can provide significant peace of mind. Obtaining a significant sum assured may be overwhelming at first. But do not be afraid! By taking these proactive steps, you may ensure that your loved ones are cared for even when you are not present.