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Term Insurance - Incresing Life Cover vs Voluntary Topup

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06 Jun, 2021 by  Ankur Gautam

I am in process of buying a term insurance. While I am interested in increasing life cover option, Max is pushing for a voluntary top up option that is up to 100% of the sum insured available one time during the policy tenure. The incremental premium will be as per today`s premium amount.


Calculations -

Premium for 2.5 Cr = 26k (w/o increasing cover option)

Premium for 2.5 Cr = 42K (with increasing cover option)


This personal is saying why pay an incremental 26k from today when one can incerease the coverage anytime later at a premuim applicable today.

What is advisable here?


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08 Jun, 2021

Dear Ankur


One needs to take a term cover to safeguard the family in case of an eventuality happens at a young age and the dependents end up in a financial discomfort due to loss of life.


Each individual has to plan his finances based on their risk profile and asset backing. Many would recommend going for increasing cover. However, I recommend sticking with a cover that doesn't have an increasing cover. With age our earnings increase, allocate the differential amount Rs.16,000 in your case and the incremental earnings by investing in Equity Mutual Funds or other assets which you understand and are comfortable with.


You can review your financial position after few years and decide to increase the cover.


Hope I have addressed your concern


Stay Safe

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08 Jun, 2021

Increasing term with guaranteed insurability can mane sense but not a term insurance which assures you price guatantee only .

So go for regular term and not increasing term .

Guaranteed insurability ensures incremental insurance even if your health has deteriorated .


Term insurance need two underwriting , financial and medical . Both will be done at later stage .


Hence normal term is better .

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