Shifting term insurance

POSTED BY Prasoon ON January 15, 2012 2:31 pm COMMENTS (9)

Currenly I have Term Insurance of 25L from LIC and 30L from SBI. My total requirement is of 60-70L. I am planning to have two policies in near future – 25L from LIC online (if that will be cheaper than the current one) and 50L from HDFC Online. So, that will complete 75L insurance and I’ll be able to cancel current two policies.

Now my question is that, how should I proceed? Cancel what first and take what first? At any point, I don’t want to be under-insured. At the same time, I don’t want to be over-insured in eyes of insurance companies by declaring current insurance policies. What is recommended way?

9 replies on this article “Shifting term insurance”

  1. Dear Prasoon, Yes, it’s more & more sensible now.



  2. Dear Prasson, even for the given situation that you are adequately covered by your existing policies, there is one more reason to act now, Your age. If you opt to purchase even say in July or Sept 2012, the age factor may increase your prem. even for an online policy.

    By the way, if the difference in prem. is the reason to switch over to an online policy, Should the switch be not now?



    1. Prasoon says:

      I understand your point. That’s what my plan is. I will take HDFC online (50L) in next 15-20 days (as you cleared my confusion regarding 10X/20X logic). I’ll not pay future premiums for SBI, which is due in Jun/Jul. I’ll take LIC online if it comes and if it is cheaper. And if I take that LIC online, I’ll stop future premium for current LIC policy.


  3. Dear Anand, then who is stopping you right now from going ahead & purchasing that 50L online cover.

    Yes You make sense now.

    Thanks for the praising words that we are able to help you.

    Please keep posting your queries.



    1. Prasoon says:

      What was stopping me was actually my confusion about what to take first and what to cancel first. That was my question, which you had cleared in your very first answer.
      I was just concerned that if there be any issue if I buy a new plan of 50L, as in that case my total insurance will be 110L in eyes of insurance provider.

      Why I have not taken it yet, because I am already insured (60L) with other insurers. I just want to shift because of low premium.

      To sum it all, I am already insured with required amount with SBI and LIC. I will shift to HDFC and LIC online(if that comes) just because of low premium and not because of additional insurance.

      Thanks for all the help 🙂

  4. Prasoon says:

    I do agree with you more than 100%. Thanks to people like you and blogs on this website, my investment/insurance knowledge is increased in last two years.

    Sorry, if I couldn’t make it clear. But, LIC online (25L) will just be a replacement of current LIC plan (25L). It won’t be additional. For additional, I am taking 50L online pvt insurance anyway.

    So, my total insurance will be 75L (which is my requirement) in both cases. Whether I continue current LIC plan, or I take online (if it comes).

    Do I make sense now?

  5. Dear Prasoon, Frankly I do not know when your wait for online term cover of LIC ‘ll end. But I do know, It’s advisable to purchase your term covers as early as possible.

    Imagine a situation after 2-3 months from now on wards, you are still waiting & something happens to you, who ‘ll suffer due to less than required term cover?

    Think over it.



  6. Prasoon says:

    Thanks for the reply.

    If that logic of 20X is correct then I guess, I have nothing to worry. I was under impression that it was 10X. Now, I’ll declare current, take new and then cancel old one after a bit time.

    About LIC, I already have one. Will cancel that only after taking LIC online. And I’ll take that only if LIC introduces it (as you mentioned :-)) and if that is cheaper than the current one.

  7. Dear Prasoon, before cancelling any existing policies, please purchase an adequate new cover. Then only think of canceling the old cover.

    May I know why you are afraid of not declaring your older policies to the new insurer?

    In general, up to the 20 times of your annual income multiple, the ins. co. ‘ll not care for the term cover purchased by you either in a single policy or in multiple policies.

    Yes there was some talk for LIC’s online plan but till date it’s merely talk & no walk is there from LIC for the same. It’s up to you, how you want to move ahead.



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