POSTED BY January 4, 2013 8:46 pm COMMENTS (2)
ONI am a 33 yr old with a monthly salary of 50k. I have a 1 Cr term insurance from Aviva. I was trying to take a second policy from Aegon and they told me that according to IRDA, my maximum cover can be only 1.25 Cr total (all my policies) and they can give me only cover of 25L. Is this correct? Kindly advise.
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At present almost all insurers use the human life value approach which gives a thumb rule based on age and salary. Soon this will change as IRDA wants them to use the need based approach where they take into account all financial goals and retirement before finding max limit on life insurance. This is not yet in place I think.
usually for a person with children will need more insurance than a married person with no children and the unmarried.
If you have children you could cite their marriage and education needs as reasons for getting more insurance
search for need based insurance calculators to figure out the insurance amount
Here is one
http://freefincal.wordpress.com/comprehensive-insurance-calculator/
Of course if the need based approach gives your limit as 1.25 cr nothing can be done!
Whatever method you use there is an upper limit
max amt to which insurers will allow a person to be insured depends on the underwriting rules followed by individual companies. There are many methods to do this. One such ,method is called Human life value
Whomever you take it from there is an upper limit.