Insurance Term Plans - Would you buy a $5m coverage term plan (if it even exists) or multiple $1m term plans?

Hi YY,

​

Yes, such plans do exist and are sometimes referred to as Jumbo plans.

​

While you can purchase all $5M with one insurer, you'll definitely undergo quite extensive underwriting checks, both health wise and financials wise. Insurers will need to see if your situation does justify the amount of coverage. And of course your health will play a part.

​

If I needed such an amount of coverage, I'll likely split it up a little, perhaps over 2-3 insurers given that in the extremely unlikely event of a failure of an insurer, your policy payouts are still protected by the policy owner's protection scheme, on an aggregate per-insurer basis. Also, you have the freedom to adjust one policy without impacting others. If you find yourself cash strapped, you can still retain some coverage if you are forced to lapse say, 1 out of 3 policies.

​

Of course, that's not to say that there aren't people who get a $10M term coverage with a single insurer. I've seen one such policy before. There's nothing wrong with that too.

​

Split policies may incur more costs (since you won't be able to get large sum discount pricing) and have a fair bit of administration (you'll have to apply multiple times) however it may bring you the peace of mind that you are looking for. And anyway, once you've gotten the coverage approved and issued, it's just a matter of keeping them in force.

I would split it ... esp if there is not signficant savings.

Ask ur agent or get more knowledgable agent. agent more impt

May want to consider the following:

​

1. Different companies will have different ways of measuring your risk and charging you differently. You may find it more efficient planning wise and cost wise to pursue a single policy instead, but you will need to ask around for quotes.
2. 5M is not a common sum to give. 1M is typically more common, by writ of what you need (rmb, every dollar you spend is a dollar not deployed elsewhere). Better to know what you need first, and then decide if you need to go this far.
3. If 1M is the most companies can go, you may be forced to buy across different companies. Be patient, keep a look out for promotions and discounts.