Claiming multiple term insurance is legal in India. An individual may buy multiple term insurance plans to provide enough coverage to their family.
A term insurance establishes a financial security in the absence of the primary earner. The policy provides financial protection to their family. Responsibilities grow with the passage of time. For protecting your life goals, you may need to review your term insurance plan from time to time. There may be a need to buy another term insurance plan to protect your goals.
If you have two term life insurance plans, read this blog to understand the advantages and disadvantages of having multiple plans. Also, know how to claim multiple term plans from different insurance companies.
Advantages of Having Multiple Term Insurance Plans
A term insurance policy is a cost-effective way to provide financial protection to your family when you are not around anymore. Sometimes, a single term plan may not help you meet all your needs. For adequate protection, you may add another term plan to your portfolio.
Having multiple term plans have various advantages, and they are listed below:
The coverage needs increase with increasing responsibilities - One term plan may not be sufficient
Growing responsibilities will demand a higher need for protection. The existing term insurance plan may not be sufficient for your increasing obligations.
For example, you had bought a term plan with Rs. 50 Lakh cover when you started earning. A few years later, you got married, and you added your spouse to the same policy.
After a few years, you both become parents and your responsibility increases. You feel that the same term insurance plan is not sufficient to act as a financial umbrella for your family if something happens to you. You buy a new plan for sufficient coverage.
So, having multiple term insurance plans will fill the gap between your coverage needs and the increase in responsibilities.
Higher chance of successful claim settlement
While filing the proposal form for a term plan, you shouldn't hide anything as it might lead to rejection in the issuance, or it may create issues when the beneficiaries claim the benefits. However, the claim could be rejected by the insurance company due to any reason. If you have more than one term insurance plan, your family may get the benefit from the other insurance company.
Chance to enhance the term plan with riders
Riders are optional in-built features that a policyholder may add to their policy to enhance the coverage. Adding riders to the plan will increase the premium as it is enhancing your plan.
Let us consider an example to understand this. Suppose the term insurance plan that you have offer disability cover but doesn't include critical illness coverage. You think having critical illness coverage will be beneficial for you in the future. Buying a term plan with critical illness cover will help you financially. And by having multiple term plans, you have comprehensive protection.
Disadvantages of Having Multiple Term Insurance Plans
However, having multiple term life insurance plans may also have some disadvantages. Weighing the pros and cons before you buy two policies will help you understand your financial needs and the gaps in fulfilling them.
Listed below are a few limitations of buying multiple policies:
Have to pay more for multiple life insurance policies
You will have to pay a certain premium for every policy you buy. If you have 2 term insurance plans, you will pay for both the plans. In the end, it may cost you more.
Managing multiple life insurance policies may be challenging
When you have multiple plans, you have to pay multiple premiums. That means remembering multiple premium payment dates. Sometimes, it may happen that you will miss a payment date. This is an additional hassle that you will have to manage if you have more than one life insurance policy.
How iSelect Smart360 Term Plan may Eliminate the Need of Multiple Term Plans?
iSelect Smart360 Term Plan provides comprehensive protection for your life goals at an affordable premium. The plan offers life cover till 99 years along with a wide range of benefits such as:
Block your Premium: The premium rate will be blocked for 5 years since the inception of the policy during which, you can increase the base sum assured up to 100%.
Return of Premium: All the premiums paid will be paid back if the policyholder outlives the policy term.
Critical + Terminal Illness Cover: Provides coverage against 40 listed critical illnesses and terminal illnesses.
Steady Income Benefit: Policyholder will get a monthly survival income equal to 0.1% of the sum assured. The income benefit will start when the policyholder turns 60 years till they pass away or the policy matures.
Spouse Cover: Spouse of the policyholder can be added to the same policy at discounted rate, eliminating the need to buy a new term plan.
The insurance plans can be chosen after considering the regular expenses. Both plans don’t have to be the same. The premium/returns can be adjusted according to the income capacity. Both the contracts will be valid, and an insurer doesn’t have the right to intervene with the other insurer. However, it is best to disclose all the facts to the insurers.Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised to exercise their caution and not to rely on the contents of the article as conclusive in nature. Readers should research further or consult an expert in this regard.