Am I over insured?

POSTED BY Rajesh Manoharan ON February 13, 2011 7:00 pm COMMENTS (4)

Hi friends

I have a peculiar doubt. In last 3 years, I have bought various life insurance policies as follows,

1. HDFC  – Endowment policy – Premium is 12400 pa – term till 2020 – SA is 4L

2. LIC – ULIP (Profit Plus) – Premium is 12000 pa – term till 2014 – SA is 5L

3. LIC – Endowment policy – Premium is 11400 pa – term till 2014 – SA is 2L

4. LIC – Term Insurance – Premium is 18000 pa – term till 2041 – SA is 30L

5. Birla Sunlife – Dream Endowment Plan – Premium is 60000 pa – term till 2030 – SA is 14L


Now my question

a. Am I over insured?

b. In case of any unwanted events will I get insurance from all the companies?

c. How better can I restructure my insurance needs?

<<<Edited with more info dt:14/Feb/2011>>>

I’m 30 years old and single, working in a stable job and earning around 60k pm on hand. I have education loan for which I’m paying EMI of Rs.9000. I have bought shares in last 1 year and invested around 60K (value of the same now is 53K). I’m doing SIP in 5 MF schemes (4 are equity oriented and 1 is balanced), monthly outgo is 12K. Monthly expense is around 25K towards, rent, utilities and groceries. I do have a credit card, but pay all dues in time, so no balance as of now.

<<<Edited with more info dt:14/Feb/2011>>>



Rajesh Manoharan


4 replies on this article “Am I over insured?”

  1. bharat shah says:

    i like to advise, you should review your existing life insurance policies, particularly endowment and ulips, and think about paying off/surrender, if found , expensive than the alternate term insurance + saving/investment in your choice assets. it would be worth for long run.

  2. ashal jauhari says:

    Dear Rajesh, Thanks for the update. Out of your 5 policies, 2 are maturing in 2014 & by that time , I hope you ‘ll be married. So your net ins. cover from remaining 3 policies ‘ll be 48L Rs. only. So you may ignore these 2 policies’s cover for your long term future calculations. Your 60K cash in hand salary indicates that your present cover of 48L Rs. (adjusted) is around 6.5 times of your annual income. Considering the situation that you are not married right now hence no family, no major loan liability in the form of home or car loan, have assets worth of 5L Rs., Your current cover of 48L Rs. is enough.

    Once you are married, Increase your Life cover as per the then income level & financial requirements.



  3. ashal jauhari says:

    Dear Rajesh, In your query, few important points are missing –

    1. Your current income
    2. Your wife is working or not
    3. Your current loan liabilities
    4. Your family size (mainly your financial goals for your children)
    5. Current value of your assets
    6. Current portfolio structure

    Without knowing above points, advising you ‘ll not be right thing.



    1. Rajesh Manoharan says:

      Hi Ashal,
      Oops.. sorry for missing them.. Here goes the details,

      1. Your current income – On hand 60K pm
      2. Your wife is working or not – I’m single
      3. Your current loan liabilities – Have education EMI Rs.9000 to be paid until 2012
      4. Your family size (mainly your financial goals for your children) – Nothing planned as of now
      5. Current value of your assets – around 5 Lakhs of liquid assets.
      6. Current portfolio structure – Equity (10%), MF (both debt & equity oriented) (80%), Cash (10%)

      Believe this helps.


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