Does it make sense to buy 2 term insurance policies from 2 insurance companies?

Great question JQ Chen, rarely do we think about the difference in purchasing from multiple insurer compared to just one insurer!

The benefit of splitting your coverages between insurers is mainly for diversification (in case one insurer goes bankrupt etc) and to maximise the government's Policy Owner's Protection Scheme!

Under this scheme, our life insurance policies are insured up to $100,000 per life assured per insurer by SDiC (governed by MAS). Meaning, if you bought a $200,000 term life plan from insurer X, you only are insured up to $100,000 by SDiC. But if you had bought $100,000 term life plans from insurer X and Y each, you will be insured up to $100,000 per insurer i.e. $200,000.

The cons is inconvenience of applying for two plans and of course, it would likely cost you more to split the plan between two insurer (logic: cheaper when you buy in bulk).

Find out more about SDiC and the Policy Owner's Protection Scheme at:

https://www.sdic.org.sg/public/pp_scope_of_cove...

You can layer your term insurance policies and add more as you progress in your life stages. When that happens, they don't necessarily have to be from the same insurer as it often depends on what's available or on promotion then as well.

Eg I increased my (and my husband's) term coverage by almost double recently because we now have a child who's financially reliant on us. We looked at how much our dependents (we single-handedly support 5 dependents in total), how much they would need if something were to happen if we are no longer around, and added a new term policy to cover that difference.