When I was 21, i signed up for a CI plan 100k coverage. 7 years later, my agent asks me to increase coverage. Does it mean i have to forgo the 7 years of premium i have paid as it is a life plan? - Seedly
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Critical Illness (CI)

Insurance

Life Insurance

Bryan Chong

Asked on 05 Jul 2020

When I was 21, i signed up for a CI plan 100k coverage. 7 years later, my agent asks me to increase coverage. Does it mean i have to forgo the 7 years of premium i have paid as it is a life plan?

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Hi Bryan,

You should check to see if you really do need increased coverage first. If you don't, then there's no need to buy an additional plan. But, most likely you do, and you can still keep the old plan, while making up the difference with a new plan.

The new plan could be a whole life or a term, it really depends, but as you are less than 30 years old, a whole life would probably make more sense for CI cover. Remember, you don't need to get a lot, just enough to make up the short fall. Your older policy has been in force for a while now and the compound effects of the bonus is something you want to keep going, so keep the old plan.

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Hey there!

You might want to consider purchasing another policy if that works for you, eg. getting a term plan to cover your essential working years.

Financial planning is an integral part of life. You can reach me here to find out more.

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Not necessary. Here is what I will suggest for you to do:

Insurance Portfolio Summary

Firstly, one of the most important things to do is to have a complete understanding of your existing insurance portfolio. Through this process, it allows us to understand the coverage that we have, any financial gap, as well as to find out whether we are overpaying for our insurance policies.

Key Reasons Why:

Why Every Client needs an Insurance Policy Summary

When you know that you have the right policy (that you signed up 7 years ago), you just need to touch up in the later years when the needs arise. This is like building a castle where we start by laying the foundation. When the resources become available, we will continue to stack the bricks up over time.

I share quality content on estate planning and financial planning here.

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Hi Bryan,

I think you shouldn't be cancelling the policy that you have already paid to date, as that is actually detrimental for you.

If your agent is asking you to increase your coverage for CI, you might want to use the guideline of 5x your annual income to see actually how much more coverage you actually need before discussing with your agent.

Also in instances where you are looking to increase coverage, you can actually buy a term plan instead of getting another whole life policy, which is the more affordable and best value option in your case.

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Hi Bryan, no you do not. You can keep your old policy which you should, and just top up by buying another policy for however much more coverage you'd need.

So if now, you need 250k, you just need to buy 150k more since you already have 100k.

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