Term Insurance policy

POSTED BY KK Babu ON December 26, 2011 5:24 pm COMMENTS (5)

Dear all

My company provided me a term insurance policy (Rs 45 Lakhs) apart from another Accident benefit policy (Rs 45 Lakhs). But, I am not sure I will contine for a long in this organisation.

Hence, I would like to have a separate Term Insurance Policy of mine for an amount of Rs 50 Lakhs. I am into 30% tax bracket.

1. Kindly suggest me a good Term Policy (online or offline). Also let me know whether I have to declare to the LIC about my present Employee Term Policy or not required to mention.

2. Is it good to take a single policy of 50 Lakhs or 2 policies of 25 lakhs each

3. I am 37 years old and would like to have a policy term of 30 years or more. Is this ok or better to reduce the duration of policy to reduce the premium.

Kindly guide me
Thanks, KK Babu

5 replies on this article “Term Insurance policy”

  1. Dear KK Babu, Please check the online plan I-Life of Aviva for 50L Rs. single policy. Later on you may add another policy of 50L Rs.



  2. KK Babu says:

    Dear all

    I would like to thank you all for your valuable replies.

    Yes. I would go by your suggesetions of taking online term insurance policy. But, can you suggest me a good policy.

    Secondly, as i am already covered by employee group term insurance poicy (45L), initially, I would like to go for a coverage of 50 L only instead of 1 Cr. Kindly let me know, is it better to have one policy of 50 L or 2 polies of 25 L each. (Ofcourse, a 10% additional premium is affordable, if some other benefit is available in going for 2 separate policies).

    thanks. KK Babu

  3. Dear KK Babu, as you are in 30% Tax slab, it indicates your yly income is at least 10L+. Purchasing a 50L cover, means getting money for next 5Y income of your’s. For the very crude ratio as suggested by dear justgrowmymoney, your term cover requirement is somewhere around 1Crore to 1.5Crore. if we deduct the 45L cover that you are having from your employer, the actual cover requirement ‘ll be around 1C. This is a very crude calculation. The cover amount may change if you are running a huge home loan as well as children are younger. another factor to decide the cover amount ‘ll be your mly or yly living expenses.

    Based upon all these things, first of all please decide your cover amount. Please check various onlin portals to know the prem. for your age & the term you want to cover. If your financial liabilities towards your family, kids are going to be over arounf the age 55-60. Please opt to purchase the dover till age 62. In case your liabilities may rtun well after your retirement, please opt max. possible term.

    Buying a single or splitting the cover in 2 policies ‘ll be a personal call depending upon your comfort level with the insurer if you opt to purchase a single large sum assured policy
    from it.




  4. Babu – Your term insurance should be about 7-10 times your annual income. Going by the fact your company provides you a 45 lac cover I would suppose that your annual income is way above 5 Lacs so your insurance need would push 1 crore and over.

    1) Employer insurance is group insurance and need not be declared when taking an Insurance. Go for the online plans available plenty in the market as the premium is lower.

    2) Split your policy into 2*50 Lacs

    3) Have the policy as long as possible/as long as you have financial obligations. Given you are 37 if you take a policy for 30 years, by the time you are 67 your financial obligation to your family may mostly be done. At some point you dont see a need for the insurance just stop paying the premium and the policy lapses. {A lot of debate can go on this but I think you get the drift!}

  5. deepak singhal says:

    1 – I think you should go with LIC (highest claim sattlement ratio) term plan
    2 – get one term plan rather than two , you have pay less as compare to two plan
    3 – I think you should go for 20 year term plan



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