Diversifying your life cover | Value Research Diversification in insurance is advisable but it should be limited to two policies
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Diversifying your life cover

Diversification in insurance is advisable but it should be limited to two policies

I am 29 and earn Rs 7.5 lakh annually. I plan to take Kotak e-Preferred term plan with Rs 35 lakh cover, for a 30-year term. I want to insure myself for Rs 75 lakh with two or three policies. Please suggest other policies that I can take and which riders should I opt for?

It is good to buy a term insurance policy at an early age because insurers charge high premiums at older age. The term of your policy should be long enough to cover you until you have financial responsibilities. If you expect to fulfill all responsibilities by 60, you may go for a 30-year term otherwise increase the term.

Kotak e-Preferred is an online term insurance policy with a 'step up option' that allows to increase the cover on special occasions like marriage, purchase of house or birth of a child; where your responsibilities may increase and hence the need for higher protection. This is a good policy.

Diversification in insurance is advisable but should be limited to two policies. You can also choose either one of HDFC Life Click2Protect and ICICI Pru iCare as the second policy.

Riders offer additional protection and should be taken after assessing the needs or risks that one is exposed to. Most insurers offer 'accidental death and disability' and 'critical illness' riders. If you have a family history of any dreadful illness, you must buy a critical illness cover. And if you want to insure accidental risk, choose a standalone policy as it can cover disability as well. Disability causes more financial stress as the income can go nil with high medical treatment costs.

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