₹2 Crore Term Insurance Plan

No. As of 22 September 2025, GST on individual term insurance premiums, including ₹2 crore term life insurance, has been reduced from 18% to 0% under the government's GST 2.0 reforms. This means the premium you pay today is the actual base premium, with no tax added on top. This exemption applies only to individual term plans; group term insurance policies, such as those offered through an employer, still attract 18% GST.

What Changed: 18% GST to 0% GST (Effective September 2025)

Until 21 September 2025, every term insurance premium carried an additional 18% GST, which meant a portion of what you paid each year went toward tax rather than your cover. From 22 September 2025 onward, following the GST Council's reforms, individual term insurance premiums are fully exempt from GST. For someone buying a ₹2 crore term plan, this translates directly into a lower annual outgo for the same sum assured, with no change to the coverage itself, the claim process, or the payout your nominee receives.

How Much You Save on a ₹2 Crore Plan: Before vs After

For instance, let’s consider a 25-year-old woman opting for the Young Term Plan by Canara HSBC Life Insurance with a ₹2 crore sum assured over a 30-year term. Here’s how the numbers change when GST was applicable vs. now.

Before the GST reform, the same cover would have cost ₹1,393.58 a month once 18% GST was added, meaning she now saves roughly ₹3,738.96 every year, simply because the tax has been removed. Her coverage, claim process, and payout remain exactly the same.

A ₹2 crore term insurance plan comes with features designed to provide substantial financial protection and support your family’s long-term financial needs.

Here are the key features and benefits to consider:

• Comprehensive Family Protection: This plan offers peace of mind, knowing your dependents will have a financial safety net to handle essential and aspirational needs, from day-to-day expenses to future goals like higher education, weddings, or property investments.

• Addresses Inflation: With rising living costs, what seems like a large amount today may fall short in two decades. A ₹2 crore plan gives your family a fighting chance against inflationary pressure over time.

• Income Replacement: If you’re the main income earner, your absence could drastically affect your family's finances. A two crore payout can act as an income replacement for several years, helping your family stay financially stable.

• Loan and Debt Clearance: Home loans, personal loans, or business liabilities can become a heavy burden on your family if left unpaid. This plan ensures that your financial commitments don't pass on as liabilities to your loved ones.

• Affordable Protection: Despite the high coverage, term insurance plans are surprisingly affordable, especially if you buy early. Premiums are lower for younger and healthier individuals.

A ₹2 crore term insurance plan offers your loved ones strong financial protection in your absence. Here's how it works, from choosing the right cover to how your nominee receives the payout.

• Evaluate your current income, liabilities, number of dependents, and future goals to confirm that ₹2 crore is an adequate cover.

• Choose the duration of the policy, typically between 10 to 40 years or till age 99, and decide how long you want to pay premiums.

• Pay premiums regularly as per your selected frequency, monthly, quarterly, or annually, or opt for limited pay or single-pay modes.

• Once your policy is active, you are insured for the full ₹2 crore from day one. If you pass away during the policy term, your nominee receives the payout.

• You can enhance your coverage by adding optional riders such as critical illness or accidental death benefits for added protection.

• If you pass away, your nominee can file a claim. Once the insurer approves it, it disburses the payout as a lump sum, staggered income, or a combination, depending on your chosen option.

Example of a ₹2 Crore Term Plan Payout

Consider Ananya, a 25-year-old marketing professional based in Pune, earning ₹12 lakh a year. With a home loan on the horizon and long-term financial goals ahead of her, she evaluates her income and future liabilities and decides a ₹2 crore sum assured gives her family adequate protection.

She opts for the Young Term Plan by Canara HSBC Life Insurance, choosing a 30-year policy term to align with her expected loan tenure and career runway. Paying monthly, her premium works out to ₹1,181, a straightforward, budget-friendly outgo for the level of cover she's securing.

From the day her policy is issued, Ananya is insured for the full ₹2 crore. If something happens to her during the 30-year term, her nominee can file a claim and, once approved, receive the payout as a lump sum, staggered income, or a combination of both, depending on the option Ananya selects at the time of purchase.

Choosing the right ₹2 crore term insurance plan is crucial to ensure your family’s financial security in your absence. Several important factors can help you make an informed decision, from the insurer’s credibility to the policy’s flexibility and affordability. Here’s what to consider before finalising your plan.

• Insurer’s Reputation and Claim Settlement Ratio: Choose insurers with a strong financial background and a high CSR to ensure your family’s claims will be honoured promptly. With a Claim Settlement Ratio of 99.52% for FY 2025-26, Canara HSBC Life Insurance is one such trusted provider. Our good track record in customer service helps us stand out and makes your selection easier.

  • Solvency Ratio: Beyond claim settlement, an insurer's solvency ratio tells you whether it has the financial strength to honour claims well into the future. IRDAI mandates a minimum solvency ratio of 1.5 (150%) for life insurers; Canara HSBC Life Insurance maintains a solvency ratio of 189.9%, comfortably above the regulatory requirement, reflecting our long-term financial stability.
    

  • Policy Term and Flexibility: Pick a policy term that aligns with your financial goals, typically until you expect your financial liabilities to end, such as your children completing their education or your home loan tenure ending.
    

  • Premium Affordability: Use online premium calculators to compare quotes from different insurers for the exact ₹2-crore sum assured. Premiums vary based on your age, health, smoking habits, and occupation.
    

  • Riders and Add-Ons: Look for optional riders that add value, such as critical illness cover or accidental death benefit, especially if you want enhanced protection.

While the base ₹2 crore term plan gives your family a strong financial foundation, riders let you tailor that protection to risks specific to your life stage and health profile.

Here are the key riders available with term plans:

Critical Illness Rider

The Critical Illness (CI) rider pays out a lump sum on diagnosis of a covered critical illness, such as cancer, heart attack, or major organ transplant, giving you funds for treatment while your base life cover stays intact. This payout comes to you while you're alive, separate from the death benefit your nominee would eventually receive, so you can use it to cover urgent medical expenses, offset lost income during recovery, or repay debts without dipping into savings.

Accidental Death Benefit Rider

The Accidental Death Benefit (ADB) rider provides an additional payout over and above your base ₹2 crore sum assured if your death occurs due to an accident. Since accidental deaths often come with additional financial shocks, this rider gives your family a larger cushion at a time when unexpected costs can be significant.

Waiver of Premium Rider

This rider typically ensures your policy continues without any further premium payments if you're diagnosed with a critical illness or suffer a permanent disability, so your family's cover doesn't lapse due to a loss of income.

A ₹2 crore term insurance plan doesn't just protect your family financially. Here's how the benefits look, referencing both the old and new section numbers.

• Premium Paid: Section 123 (formerly Section Section 123): Premiums paid toward your ₹2 crore term insurance plan qualify for a deduction of up to ₹1.5 lakh per year under Section 123, read with Schedule XV of the Income Tax Act, 2025 (previously Section Section 123 of the Income Tax Act, 1961). This limit is combined across all eligible Section 123 investments, not exclusively for insurance premiums.

• Health-Related Riders: Section 126 (formerly Section Section 126): If you've added health-related riders, such as a Critical Illness rider, to your term plan, the premium paid toward that rider may be eligible for a deduction of up to ₹25,000 per year under Section 126 (previously Section Section 126), subject to applicable conditions.

Death Benefit Payout: Schedule II(2) (formerly Section Schedule II (Table S.No. 2)): The lump sum death benefit your nominee receives is generally tax-free under Section 11 of the Income Tax Act, 2025 (previously Section Schedule II (Table S.No. 2) of the 1961 Act), subject to the conditions specified under the Act.