Ask Value Research

Should I split my term plan across four insurance companies?

Spreading your insurance across two insurers can provide you adequate diversification

I need a term cover of Rs 1 crore. Instead of a single term plan, should I buy 4 of them of Rs 25 lakh each from different insurance providers like hdfc,sbi,icici and lic?
-Arun

Many individuals buy more than one insurance plan, especially while buying a large term cover, to spread their insurance across more than one company. But splitting across four may lead to over-diversification. It can make the claim process cumbersome, should a claim arise. Besides, it may also work out to be more expensive. Therefore, in our opinion, splitting across two insurance companies should be sufficient.

This article was originally published on December 13, 2016.

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