Term & Health Insurance

POSTED BY Prakash Iyenger ON November 14, 2011 1:37 pm COMMENTS (3)

I am 42 Years and have plans to take Term & Health Insurance some time in Nov 2011 and need your inputs for few queries as below:

Term Insurance:
1. What period of cover I should take?
Considering I am consultant/self emplyd, what are the criterion s to base the term?

2. What sum assured is ideal to take for my age and considering the maximum possible term coverage offered by insurance company today. [ 1Cr, 2Cr, 3Cr, 4Cr etc]

3. Typically what would be the premium/range?

Health Insurance:
1. I have an existing coverage for Father aged 71 Yrs coverage at 1.5 Lacs
and Mother aged 65 Yrs coverage at 1.5Lacs;

a. Can you please recommend what is the maximum age coverage available by any insurance company-For a top up plan for them?

b. Also recommend what amount of top up plan is recommended-Additional 3.5 L for each of them?

c. Or Family floater top up plan for say 7 Lacs for both my parents, if such thing is offered?

d. Typically what would be the premium/range?

2. My family[wife, 2 Kids] are covered by 3L+3L+2L+2L=10Lacs;
a. Advise if we decide to take a family floater, what amount should we consider-
Say 5L/ 10L family floater plan would be good?

b. Typically what would be the premium/range?

Appreciate your valuable inputs asap.

Thanks
Prakash

3 replies on this article “Term & Health Insurance”

  1. Dear Prakash, while calculating your term cover needs, one more input is required, the current assets, investments, wealth you have. For example you already own a house & do have say 25L Rs. investments as on date. so a part of liabilities for family’s welfare are over. Roof is there on the head & 25L Rs. are there to take care of expenses for some time.

    Considering the age of your younger d’ter (8Y), in my view, you should go for age 60 term. i.e. 18 or max 20Y term from now on wards. The reason is for your age 60Y or 62Y, your y’ger d’ter ‘ll be already 26-28Y old & hence may not require any more monetary support from you for her life.

    To calculate exact cover requirement, calculate the money you ‘ll spend today for your both d’ters’ education & career. Inflate this figure for actual consumption years & based upon that input, calculate your actual term cover requirement.

    Thanks

    Ashal

  2. p.s.prakashiyengar@gmail.com says:

    Hi Jitendra,

    For you to suggest an appropriate term insurance time frame & sum assured,
    please find below some inputs, queries elaborated;

    1. I am in consulting business and annual income is not predictable precisely!
    Consider for example an annual income of of Rs10L and 20L;

    2. My age as I said is 42; I have 2 daughters aged 8 Yrs, 12 Yrs.

    3. In Liabilities areas; What all should be considered-Only loans?

    4. Since I am in consulting, age of retirement does not matter I guess.
    Still for calculation purposes, if we consider working till 50 Years & 55 Yrs & 60 Yrs;
    * I would like to know from you what is the Term & Sum assured I should consider
    for these three working periods? *

    5. Assuming that there would not be any loan liabilities by my age of 50 Yrs,
    what is the optimal term/sum assured-I should be taking.

    6. I am also not clear on one another part;
    If some is not working/ earning any more; [Say they retire early at 50/ 55/ 60 Yrs]
    * Do you feel those kind of people do not need term insurance beyond their retirement age? If yes, what are the reasons? *

    Put it in other way:
    * If some one plans to retire at 50 Years [Stop earning]-
    Do you see any valid reason he should/ should not take term insurance coverage till 70Yrs * [That is from 42 Yrs to 70 Yrs]

    7. Finally:
    * Should I take term insurance from 42 Yrs to 50 Yrs: OR 42Yrs to 60 Yrs; Or 42 Yrs to 70 Yrs; Or 42 Yrs to 75 Yrs?

    * Also recommend what sum assured I should take? [ 1Cr, 2Cr, 3Cr, 4Cr etc]

    * Which Insurance companies would be better & typically what would be the premium range for the above sum assured amount?

    Thanks in advance for your valued feedback.

    Best Rgds
    Prakash

  3. jitendra solanki says:

    Dear Prakash,

    Term insurance coverage should be related the amount of liabilities you have.

    Typically it is calculated based on your earnings and expenses including your liabilities which require a detail information.The term of policy is related to the liabilities you are running.If till 70 you will have liabilities in any form then you should cover yourself up to this age.You can also break up into two term policies- one with loan liabilities coverage (if any) running up to the loan period and other to cover your dependents financially up to an age they become independents.

    Although its difficult to give any figure based on your information still at least 10 times of your annual income you should be covered bare minimum.

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