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Can one take multiple term insurance plans from different companies? If yes, will the sum assured be paid by all the insurers in case of a claim? Please clarify.
Sarbvir Singh Joint Group CEO, PB Fintech: Yes, you can opt for multiple term insurance plans from different companies. This approach can be beneficial for individuals who have diverse financial obligations and want to strengthen their safety net with different kinds of benefits and premium structures. When you have multiple term insurance policies, each policy is treated independently. In the event of a claim, each insurer is liable to pay the sum assured specified in his respective policy, provided all premiums have been paid and the policy terms have been met. One key factor is full disclosure. When applying for a new policy, you must declare all existing covers, irrespective of whether they are from the same insurer or a different one. This will avoid complications at the claims stage. Spreading covers across multiple insurers is a good strategy as long as it’s well-disclosed and aligned with your overall financial planning. Before opting for multiple policies, consider factors like premium affordability and liabilities. Consulting a financial adviser can help you tailor a comprehensive protection plan that meets your specific needs.
Also read | Want to upgrade your health insurance cover? Here’s why top-up, not new policy is the way to go
I’m 45, married with two school-going kids, and my wife is a homemaker. I have a Rs 25 lakh term insurance policy purchased 10 years ago, but with rising financial responsibilities and inflation, I’m worried the cover isn’t sufficient. Should I buy a new term plan or upgrade the existing one? How
can I calculate the right coverage?
Sarbvir Singh, Joint Group CEO, PB Fintech: You are asking a very relevant and timely question, one that many people in their 40s should be asking but often overlook. A Rs 25 lakh term plan bought 10 years ago is unlikely to be sufficient today, especially with rising living costs, growing financial responsibilities, and two school-going children. Unfortunately, one cannot increase the sum assured on an existing term policy after purchase. Since that’s not possible now, the best course for you is to buy a new term plan that reflects your current needs. As a simple benchmark, your term cover should be at least 10-15 times your annual income, factoring in pending EMIs, future costs like your children’s education and marriage (adjusted for inflation), and overall household expenses based on the number of dependents. So, if you are earning Rs 12 lakh a year, you should have Rs 1.2–1.8 crore in term cover. Subtract your existing Rs 25 lakh policy and any investments to calculate the gap. You can also consider adding a critical illness rider to your new policy for added protection against serious health setbacks.
Have a question for the experts? etwealth@timesgroup.com
Can one take multiple term insurance plans from different companies? If yes, will the sum assured be paid by all the insurers in case of a claim? Please clarify.
Sarbvir Singh Joint Group CEO, PB Fintech: Yes, you can opt for multiple term insurance plans from different companies. This approach can be beneficial for individuals who have diverse financial obligations and want to strengthen their safety net with different kinds of benefits and premium structures. When you have multiple term insurance policies, each policy is treated independently. In the event of a claim, each insurer is liable to pay the sum assured specified in his respective policy, provided all premiums have been paid and the policy terms have been met. One key factor is full disclosure. When applying for a new policy, you must declare all existing covers, irrespective of whether they are from the same insurer or a different one. This will avoid complications at the claims stage. Spreading covers across multiple insurers is a good strategy as long as it’s well-disclosed and aligned with your overall financial planning. Before opting for multiple policies, consider factors like premium affordability and liabilities. Consulting a financial adviser can help you tailor a comprehensive protection plan that meets your specific needs.
Also read | Want to upgrade your health insurance cover? Here’s why top-up, not new policy is the way to go
I’m 45, married with two school-going kids, and my wife is a homemaker. I have a Rs 25 lakh term insurance policy purchased 10 years ago, but with rising financial responsibilities and inflation, I’m worried the cover isn’t sufficient. Should I buy a new term plan or upgrade the existing one? How
can I calculate the right coverage?
Sarbvir Singh, Joint Group CEO, PB Fintech: You are asking a very relevant and timely question, one that many people in their 40s should be asking but often overlook. A Rs 25 lakh term plan bought 10 years ago is unlikely to be sufficient today, especially with rising living costs, growing financial responsibilities, and two school-going children. Unfortunately, one cannot increase the sum assured on an existing term policy after purchase. Since that’s not possible now, the best course for you is to buy a new term plan that reflects your current needs. As a simple benchmark, your term cover should be at least 10-15 times your annual income, factoring in pending EMIs, future costs like your children’s education and marriage (adjusted for inflation), and overall household expenses based on the number of dependents. So, if you are earning Rs 12 lakh a year, you should have Rs 1.2–1.8 crore in term cover. Subtract your existing Rs 25 lakh policy and any investments to calculate the gap. You can also consider adding a critical illness rider to your new policy for added protection against serious health setbacks.
Have a question for the experts? etwealth@timesgroup.com
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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