Buy one term insurance policy for Rs 2 crore or two term insurance policies for 1 crore each?

Question

If I need to provide for two sets of dependents and may need to remove one set of dependents in future, does it make sense to get one Rs 2 crore term life insurance policy or two separate Rs 1 crore term insurance policies?

Additionally, had the following queries:
* After buying an term insurance policy, is it possible to change the beneficiaries at a later date?
* Would the beneficiaries of two 1 crore policies be able to apply for benefit in one go or would they have to process two claims? Consider that the policies in question are LIC Tech Term policies.

Answer 1

crore is a term in Indglish for what would be referred to as ten million in other parts of the English-speaking world. INR 1 crore is less than US$150K at the current rate of exchange.

First, congratulations on thinking of term life insurance instead of accepting the whole-life policies that Indians prefer by an overwhelming majority and that LIC, in common with insurance companies all over the world.

The answers to your questions really depend on what you want to achieve, and why at some later time, you no longer wish to provide benefits to one set of dependents. As to whether LIC will let you change beneficiaries, that is a question that can only be answered by LIC. What you might want to think about is that when you kick one set of dependents off the list of beneficiaries of your Rs 2 crore policy, the remaining beneficiaries will get Rs 2 crore should you pass away. Is that OK with you? Or would it be better to get two separate Rs 1 crore policies and then simply drop the policy whose beneficiaries are the dependents whom you ne longer wish to provide for? Your call...