Anonymous
Seeking Advice on increasing insurance coverage due to increase in dependents
The reason I am asking here because I don't want to ask my insurance agent yet because once I start asking, they will be on sales mode.
I bought a term insurance online which covers 400k which mainly covers my mortgage and now I feel like I need more coverage as I have increased the number of dependents.
let's say I am thinking of increasing coverage to 1M till age of 65.
Do I buy another term policy that covers another 400k(this is the max for online purchase)?
Do I buy a new one that covers 1M and cancel the existing one?
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Elijah Lee
25 Sep 2021
Senior Financial Services Manager at Phillip Securities (Jurong East)
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Hi anon,
You can buy another $400K DPI. But be aware that you won't be able to add waiver riders, which can be helpful if you are diagnosed with critical illness.
Furthermore, TPD definition clauses on DPI do not cover ADLs.
If you are ok with that, then compare 2 direct terms, with a $1M standalone policy (non DPI). Due to large sum assured discount; you might face a situation where the DPI is not as cost effective as a standalone term plan. I have seen term plan (non-DPI) premiums drop a lot over time. But your numbers may vary so do the maths and go with whatever makes more sense for you.
Good luck!