Can I own two term insurance policies?

Can I buy an individual term life cover if my company already covers me under a group term life policy? Will there be a conflict between the two policies in terms of maximum sum assured? Will my nominee get a claim from both policies?

- Name withheld on request

The underwriting for individual term life policies and group term life insurance works differently. The process and entitlement of the sum assured are independent of the policies. The maximum sum assured criteria for a group term life insurance is between 5 and 10 times the annual compensation. The maximum sum assured for an individual term life varies between 20 and 25 times of the annual compensation. While calculating the sum assured eligibility, group term life insurers don’t look at the personal coverage of employees, and vice-versa. So, you can buy a term life cover irrespective of the group term life coverage offered by your employer.

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Life insurance is a fixed benefit plan. Under this, claim incurred in one policy does not affect the claim eligibility of other policies. So, if you have multiple life insurance policies, claim would be admissible under each of these policies. Your nominee can make a claim under both individual and group term life plan.

Should I buy health insurance for my parents, who are over 70, since they would be covered under the Ayushman Bharat scheme?

- Name withheld on request

Ayushman Bharat is an excellent social security scheme that has now been extended to senior citizens over 70. However, if you can afford it, consider buying a personal health insurance scheme for them for the following reasons. 

• The overall sum assured of the scheme is capped at ₹5 lakh. Buy a minimum coverage of ₹10 lakh. This should be further enhanced based on one’s income, lifestyle, and previous medical history. 
• The social security scheme is valid only in its network hospitals. Your preferred hospital may not be part of the network. This can severely limit your treatment options. 
• The scheme has restrictions such as room rent eligibility. For example, you may not prefer treatment in a general ward. While the Ayushman scheme is an excellent safety net, a private health insurance will give you the flexibility for a holistic treatment.

(Abhishek Bondia is co-founder & principal officer at SecureNow Insurance Broker)

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