A term life insurance plan allows the policyholder to cover risk, by availing a policy at affordable premiums. It is an agreement between the insurance company and the policyholder, where the insurer agrees to offer financial support to the nominee by paying the death benefit in the event of the death of the policyholder within the policy tenure. However, term plans do not have any survival benefit. This is the reason they are offered at low premiums.
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The answer to this question is, YES. There is no harm in insuring yourself more than once, with a term life plan. People often buy more than one term insurance plan, to doubly safeguard the financial future of their dependents.
A person can avail two term life plans, if he owns a business or has huge debt to repay. People avail multiple term plans to make sure their liabilities are paid off, in case of an eventuality. It helps them get extra coverage.
For example, a salaried individual can buy a term plan even after being insured by the employer. To determine if you need more than one term life plan, you must first determine human life value using IndianMoney.com HLV calculator.
This will give you an idea on how much income you might lose in case of an early demise. This also helps calculate the income required by your family to lead a financially stable life on an untoward demise. Based on these calculations you can purchase one or more term plans to effectively and efficiently attain financial goals.
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Some of the reasons why death claims are rejected:
The insurers generally settle most of the claims. Check claim settlement ratio of the insurer, before availing term life plans. The claim settlement ratio shows percentage of claims settled by the insurer vis-a-vis the claims made by the policyholders. The insurer who settles claims easily is reliable and customer friendly. However, sometimes the claims get rejected due to the above-mentioned reasons. If the claim gets rejected, then your family will be left with no financial backing in a dire need. So to reduce this risk, you can opt to avail more than one term life plan.
See Also: What is a Term Insurance Plan?
You may choose to avail two term life insurance plans to meet insurance needs. You can either nominate two beneficiaries or the same beneficiary for both the plans:
Please Note: It’s important for the policyholder to disclose all relevant information on term life plans to both insurers. Both insurers must know that you have more than one term life insurance plan to avoid claim rejection.
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