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Can I Take More Than One Term Insurance Plan?

IndianMoney.com Research Team | Posted On Thursday, July 25,2019, 06:08 PM

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Can I Take More Than One Term Insurance Plan?

 

 

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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Can I Take More Than One Term Insurance Plan?​

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.

See Also: Best Term Insurance Plans In India

Scenarios in Which Death Claims are Rejected:

Some of the reasons why death claims are rejected:

  • Incorrect information in the proposal form
  • Incorrect health history submitted to the insurer
  • Insurance policy lapses

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?

Benefits of Two Term Life Insurance Plans:

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:

  • Extra Protection: If you have a huge debt to settle, avail two term life plans. One of the term plans can help your nominee settle the existing debts, whereas the other can be used to meet financial needs on demise within the term of the plan.
  • Death Benefit: The nominee gets death benefits from both the policies.
  • Lower Chances of Claim Rejection: The uncertainty of claim rejection is reduced by availing two term life plans. Even if your insurer rejects the insurance claims, there are chances that the second insurer will honor the claim.
  • Helps Attain Financial Goals: Multiple term insurance helps attain milestones. For example, if you have dependent children and a big loan to pay off, then you can avail term insurance with different tenures. One term insurance ends when you pay off the loan. The other continues till your retirement or until your kids are well-settled.

See Also: Tips Before Buying Online Term Insurance Plan

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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