If I have multiple ECI coverage (mix of standalone and rider), must I claim on all policies upon ECI diagnosis?

Hi anon,

No, you don't have to claim on both at the same time.

If I were you, I would tap on the standalone ECI policy first. This is a term plan, and if it is a single payout plan, the plan would terminate (and I don't have to pay premiums any more). If it is a multipay plan, you can still claim on recurrent/2nd CI till the end of the plan's coverage duration. If you claim on the WL, you're not utilizing the term plan and the premiums would be 'wasted'. Since the payout from a term plan is flat, the value drops over time ($200K now is worth more than $200K 10 years later), so I would claim the term first.

My whole life plan, is my 2nd line of defense. If I still needed financial resources, I would claim on my WL if there was no other choice. If not, the value of the whole life compounds over time such that even after the multiplier (minimum death benefit) ends, the payout would still hedge inflation. Furthermore, most whole life plans are limited pay, so you might even have finished paying the premiums already, and thus it's not an expense any more, but rather an asset that accumulates value and will protect you in old age.

As long as your whole life has enough payout to provide liquidity for you in retirement, to take care of ancillary expenses, it should suffice.

Hi,

Short Ans: No, you don't have to claim on all policies, and intentionally choose not to make a claim upon diagnosis, and make another ECI claim in the future upon another ECI condition. But financially, it doesn't really make sense.

Because

1. It means that you would have to continue paying for the premiums to keep the coverage.

2. Let's say you're diagnosed with an ECI in 2025 and could make a claim of $200k and you choose not to do it and leave it till the future, and when you're diagnosed with another ECI in 2055, the coverage amount is still $200k (depending on the type of insurance that you bought, the coverage is usually the same, some insurances have an 'incremental' amount in the claims due to extra interest accumulated). But assuming $200k in both 2025 and 2055, the $200k would worth more in 2025, and the purpose of the money is for 'income replacement', so you can use the lump sum of money however you wish, you can even invest and accumulate it on your side and keep it for the future in case there is a second diagnosis of another ECI (by then, the $200k would have accumulated to even more already).

3. There's no certainty that you would be diagnosed with another ECI again after you are diagnosed with one, and if you never do, it also means that you wouldn't be able to make a claim for the life insurance that you bought.​​​