Ask Value Research

Should I switch from my existing term plans?

For a large term insurance cover, it is wise to split the cover between two different insurance companies to diversify risk

Research Desk

I am 35 years old with two dependents- wife and 2 year old daughter. I have two term plans of ₹50 lakhs each - Aviva i-Life with annual premium of 4900 and HDFC Click2Protect with annual premium of ₹7943. Instead of these two policies should I take a single term insurance of ₹1 crore from Max life as the premium will cost only ₹10200?
- Amit Prakash

For a large term insurance cover, it is wise to split the cover between two different insurance companies to diversify risk. Both your existing term plans are good and recommend by us. The difference in premium is because the HDFC Click2Protect has slightly higher premium as compared to the Max Life online term plan. Rather than canceling both your existing plans, you may consider switching from HDFC Click2Protect to Max Life online term plan for a sum assured worth ₹50 lakhs. For your age the annual premium will be 5250 (assuming you are a non-smoker). The effective cost for a ₹1 Crore cover will be same and you can also benefit from the diversification. Apart from premium, the grievance resolution (99.98 percent) and claim settlement ratio (98.63 percent) of Max life is comparatively better.

This article was originally published on May 18, 2016.

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