I am 45 years, married and reside with wife and son in Bengaluru. I have availed a term life insurance plan to provide for my family in case I am not around. I was very confident in this plan, till a cousin advised me to avail another term life insurance plan for safety. He said there were cases where the life insurer does not settle the claim. I am worried that my life insurer will not settle the claim? Should I avail another term life insurance plan?
It is a very popular practice to buy a single term life insurance plan with a large cover, to provide protection for wife and kids. It is believed that if you declare all information about your health correctly and get medical tests done, the life insurer cannot reject your family’s claim. But, claims do get rejected even if the probability is small. You definitely want your nominees to get the claim money if something happens to you. It is good to have a second term life insurance plan, in case your family claim gets rejected. Your family will definitely get some money in case something happens to you. Your family can also write to the insurer which has rejected your claim, to have a relook into the case as the other insurer has settled the claim. Remember: Always declare existing term life plans to the new insurer. Choose a life insurer which has claim settlement ratio over 90. Claim settlement ratio gives the probability that your family’s claim gets settled.