Can a person have both, A PMJJBY and Term Plan ?
Can a person have both of these ?
A PMJJBY offered from bank and Term Plan from another insurance company?
Will a bank accept the claim of PMJJBY if a person have separate Term Plan also?
The insurance companies have a formula to calculate Human Life Value (HLV) which is a multiple of your annual income. (Different for different age bands)
18-35 : 20-25 times of your annual income
36-45: 15-20 times of your annual income
And so. The multiple reduces as the age band increases.
This is primarily done to ensure that the policies are not mis-used and the value of the human life is more when alive than dead.
So to answer your question, a person can have both the mentioned policies as well as multiple term policies as long as the total Sum Assured of all the policies combined is within the limits of the HLV calculation as per the person's age.
The total Sum Assured also includes any death benefit SA which might be a part of ULIPs, Money back policies, Endowment plans, etc... that the person might be having.
Hope this helps!
Thank you sir.
HLV multiple counts Annual Income at the time of taking insurance or at the time of claiming ?
Suppose I've Annual Income of 5L now and my insurer allows 20x currently, hence I took cover of 1cr.
After 10 years I bought another 1cr. cover, nd total Income at that time is 12L.
So will the insurer count HLV multiple based on income at time of claim ?
HLV is calculated basis the income at the time of purchasing the policy.
So if a person's income is 5 lakhs now and he is eligible for say 1 Cr and he buys a 1 cr policy, he has right but exhausted his HLV.
Some years later, his income increases to say 20 lakhs, now his HLV is 4 crs. So now he can buy a policy of SA upto 3 crs. (4 crs - 1 cr).
Whenever a person is buying a policy his total SA including all previous policies that are active + the SA he intends to buy right now should not exceed his HLV at the time of buying the policy.
Hope this helps!
Life Insurance is a Fixed Benefit product. You can have more than one Life Insurance/Term Insurance policy subject to financial underwriting (Insurers give you a multiple of your total annual earned income in Life Cover). Ensure to declare about your existing Term Insurance to the new Insurer.
PMJJBY is a stock standard product linked to your bank account. If you have an active PMJJBY policy at the time of buying a term plan, disclose it in the proposal form. You should be fine after that.
Thanks sir. 👍🏻