Insurance Uncovered

I have an ICICI Prudential term insurance plan for ₹50 lakh. It will cover me till the age of 60. I want to increase it to ₹1 crore to cover me till I am 75 and my spouse. Should I take another ₹50-lakh term insurance or take a single ₹1-crore policy for my wife and I, which will cover us till the age 75? Also, please tell me which insurance company will be best for me at this stage (I am 32 years old) for a joint life cover. Should critical illness be included in term cover or a separate health insurance policy?

Nilesh Anand

We will suggest that you keep your old policy. Even if this is a policy that was taken 1-2 years ago, the premium would be lower than what you may have to cough up now at your current age. So, keep your policy and buy another ₹50-lakh sum assured (SA) policy.

If your wife is a home-maker, there are only limited options for a life cover for her. Aegon, PNB MetLife and the recently launched Aditya Birla Sun Life Insurance’s Life Shield Plan offer an option to cover the spouse in the life insurance policy. ICICI Prudential and HDFC Life also cover spouses in the term policy, but they come with certain conditions and a cap on the SA.

Under PNB MetLife Mera Term Plan and Aditya Birla Sun Life Insurance’s Life Shield Plan, on the death of the primary insured before the spouse (secondary life insured), the sum assured will be paid to the spouse, and her life cover will continue with future premiums waived off.

On the death of the second life insured thereafter, the sum assured is paid to the nominee, and the policy is terminated. In case of death of the second insured before the first, the sum assured will be paid to the primary insured and the future premiums will be reduced to what would have been charged at the inception for only the primary insured (base premium). In case of death of both the persons simultaneously, the death sum assured in respect of both the first life and the second life will be paid and the policy terminated.

Both PNB MetLife and Aditya Birla Sun Life offer the joint life cover feature only if the SA of the primary/first life is greater than or equal to ₹50 lakh. The SA for the spouse/second life will be 50 per cent of that of the primary insured.

ABSL’s Life Shield offers a cover of 50 per cent of your SA to your spouse, irrespective of the occupation (even housewife). However, PNB MetLife restricts the cover for spouse to 25 per cent of SA if she is a housewife. Note that if your wife is working, look out for a separate policy for her. It could be cost-effective.

Regarding critical illness cover, we suggest you take a standalone policy rather than taking it as a rider with your base life insurance policy. A standalone CI policy will offer a more comprehensive coverage than a rider.

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