3. Small Covers Will Not Fetch You Anything

Now it’s time to get smarter. Having multiple plans will fetch you more, than having a single insurance plan that promises to cover you for longer period.

Lovaii Navlakhi of International Money Matters said that "If the cover is large, it is advisable to opt for at least two companies to ensure diversification". However the new company will definitely ask you to produce the documents of the existing cover that you already have.

4. Other Option Than Term Plans

If you are planning to discard your endowment policy or ULIP, don’t do it! You might have to face huge losses because of high commission surrender value in the initial years of these policies.

It’s not good to clear off all previous plans because it involves high loss, typically traditional plans offer only 30 percent of the total premium paid to the policy holder says Lovaii Navlakhi of International Money Matters.

“Investment insurance products reward long-term participation and generally have high costs in the beginning to deter policy holders from exiting mid-way," says Mishra of Karvy Private Wealth.

However, if you haven’t got insurance yet, it’s always better to shop for different policies and then secede on what are the plans that are suitable for you.

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