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Can term insurance be claimed from two companies?

dateKnowledge Centre Team dateFebruary 03, 2021 views125 Views
Can term insurance be claimed from two companies?

Term Insurance is a policy which stabilizes security to one’s family in their absence. The insured has to pay a certain amount of premium from time to time. This policy provides financial protection to his/her family with other returns in the insured’s death.

This insurance can be taken up to provide security to the insured’s family in death and uncertain events. Term insurance is a type of life insurance that secures the insured’s family and covers up the chances of risk and failing in fulfilling financial responsibilities. In case of accidental death and end of the term period, additional returns are provided to the insured or the insured’s family.

Looking at the financial payments, dependants, and liabilities, one can decide what plan they want to choose with the period. Considering the years and age of insured etc. he/she can opt for a plan that best suits their future family requirements.

What is term insurance, and how does it benefit the life of an individual?

Term insurance is a life insurance policy where the insurer provides credit at the end of maturity term to the insured or their family. It is a contract between the insured and the insurer where the insured has to pay premiums regularly, and the insurer provides extra financial credit in return. This policy can range from 10 to 30 years, depending upon when the person is applying for it.

In this policy, the premiums can be paid monthly, quarterly, etc., the premiums are affordable and flexible to pay in particular periods set according to the contract. It comes with additional tax benefits and reasonable prices when it comes to purchasing the policy. In case of accidental death or early death, the insured’s family can claim the plan’s death benefits.

Benefits:

  • Secure future for the family of insured
  • Covers up the loss in the absence of insured
  • Acts as a contributing factor in fulfilling financial responsibilities.
  • Provides benefits to the family of insured
  • Provides tax benefits
  • Allows to take up more than one term insurance
  • Guaranteed death benefit
  • Critical illness coverage
  • Additional riders
  • Flexible payment of premium

Things to consider before buying a term plan in India.

Age factor

  • Current loans and other insurance policies
  • Current income and expected future income
  • Age of retirement
  • Duration of term plan
  • Benefits from the term plan (death benefits, tax benefits, etc.)

Additional benefits at the end of the term

  • Current expenses and expenses for the future
  • Expenses for major events like weddings, education, medical costs, etc.
  • The amount of premium and how they should be paid.

The period between each premium:

  • Number of years before the maturity period
  • Mode for payout
  • Growing dependants
  • Growing financial responsibilities
  • Liabilities to be paid off
  • Securing future health conditions
  • Other financial responsibilities

Types of term insurances:

  • Level term plans:

    In this policy, the premium remains intact throughout the maturity period and even at the time of maturity. It doesn’t add any additional payments/ credit. This policy is suitable for those who prefer simple insurance without any frills. It is considered as the most common policy taken up by people.

  • Increasing term plans:

    In this policy, the premium keeps increasing from time to time, along with the sum assured. People who guess that their expenses and financial responsibilities keep increasing from time to time prefer this policy.

  • Decreasing term plans:

    In this policy, the sum assured keeps decreasing from time to time. People who have less financial responsibilities prefer this policy or those who have less or no dependants prefer this plan.

  • Return of premium plan:

    In this policy, if the customer outlives the policy term, they are paid with all their premiums at the time of maturity. It is considered to be the most profitable as all the money is returned along with additional benefits.

Can term insurance be claimed from two companies?

Yes, it is legal to claim term insurance or any life insurance policy from 2 companies. An individual can buy insurance from 2 companies and make regular payments to secure their financial responsibilities in the future. The individual can choose both the policies from different companies and decide the premiums as per his/her convenience.

Both the policies don’t have to be the same as any term insurance can be chosen from the options provided by each company.

It is better to have two insurance policies to secure one’s family’s future and responsibilities. Term insurance allows for avoiding risk or loss at one’s absence. Taking two-term insurances will help in securing death benefits and other financial requirements. It gives extra protection to the insured’s family.

The insurances taken by an individual can be planned after considering the daily and routine expenses/payments. Both insurances don’t have to be the same. The premium/returns can be adjusted according to one’s income capacity. Both the insurance contracts will be valid, and one insurer will not have the right to intervene with the other company/insurer. However, it is best to disclose all the material facts so that the insurer can help the customer.

The insured has to inform the insurer of previous and other current insurances to avoid conflict or loss to claim the insurance without any loss.

How will claiming term insurance from 2 companies help an individual?

There are multiple benefits for claiming two insurances. An individual can provide assured safety to their family after their death—big responsibilities like marriage, education of children, clearing up loans, purchasing a house, etc.

By taking up two-term insurance policies, one can cover their health expenses that might occur. In case, there are no health conditions; the additional amount can be saved for future purposes. In both ways, the credit is at an advantage to the insured.

There will also be an additional death benefit from both the companies to the family of the insured. There will be other returns or full return of premium at the end of the term period, which will greatly benefit the family of the insured. Each policy can be planned as per the difference in term period. For example, one policy of 10 years can be up to 20 lakhs, and another policy of 3 years can be of 70 lakhs.

Canara HSBC Oriental Bank Of Commerce Life Insurance offers term insurance policies which are of good benefits. The company provides life insurances as the best form of investment. The customers can check with the term insurance policies and their benefits and their comfortable payments and payouts.

The term insurances here have additional death and tax benefits and long term health expenses covering the multiple plans available with each having their benefits. There is also accidental death coverage. Claiming two insurances can secure the dependants of the insured. Children, grandchildren and financial responsibilities related to them can be covered. In the case of critical illness, the expenses can be paid without having to struggle for credit.

The Canara HSBC Oriental Bank Of Commerce Life Insurance offers term insurances online, and their in-depth knowledge in insurances brings out the best plans for investing and insuring credit. You can take up a plan online by visiting the website, i.e., www.canarahsbclife.com. After going through all the plans and filling in your details, the customer can immediately get started with the plan and pay premiums online. The customer can select the premiums and periods online and go through the benefits of the plan.

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Frequently Asked Questions (FAQs) for Term Insurance

This being a term plan doesn't offer any payout after maturity or expiration date.

Each insurance company has its own term insurance premium calculator. If you want to check out the premium quote, go for the iSelect Star term plan calculator. It gives a premium amount based on your age, gender, habits, education, and annual income.

You can purchase an iSelect Star term plan anytime between 18 to 70 years of age.

It depends on your needs. For example, if you want to cover a child's education or wedding expenses, you have to include them in your coverage. Your premium will be calculated accordingly.

If your key purpose is to give your Family financial protection, go for the term insurance plan. And if you want some savings, in the end, go for a traditional life insurance plan.

Go for at least 12 times cover than your annual income. Or you can go as far as 20 times coverage as per your needs.

The right time is when you don't have anything to keep your Family safe from financial storms, and they rely on you for financial needs.

If you are unable to make the payment or suffering from a terminal illness, a term plan pays a part of the sum insured to treat your disease.

Term insurance riders are attachment or endorsements made, while taking the term insurance policy, as a supplementary coverage to policyholders. Apart from the core death benefit, term insurance riders offer below-given additional benefits:

  • Accidental Death Rider When a person suffers from a terminal illness, his/her family ends up spending a significant amount in treatment and medical expenses. Accelerated death rider pays a part of the sum insured in advance to cover such costs and save the family from running out of cash.
  • Accidental Disability Rider If the policyholder can't pay the premium because of an accident or permanent disability, a sudden disability this pays the premium on behalf of the policyholder till completion of policy term or for a defined duration.
  • Critical Illness Rider If the insured person gets a heart attack, cancer, or any other critical illness, this rider pays a lump sum on valid diagnosis.
  • Premium Waiver Rider If the policyholder is unable to make payments due to income loss or disability, a premium waiver rider waives off all future premium payments. And the term policy remains active until the expiration date.
  • Income Rider: The rider ensures that your family receives regular income + sum insured in case of unfortunate demise of life insured.

Anyone can go for life insurance as it offers some savings after the maturity date, but it doesn't cover the protection of your family . The best term insurance plan is solely designed for taking care of loved ones if something happens to you. Term plans act as a shield between your family and sudden financial fall. They make sure that your family lives a healthy life even after you. With a little amount paid per year, you can be worry-free from the family's financial conditions.

Questions that you need to ask while buying Term Insurance?

  1. 1. Amount of premium you have to pay based on your age, habits, education, and monthly income
  2. 2. The total number of benefits covered in the term plan. Do they include benefits that you care about the most?
  3. 3. How to save money on tax if you pay for the term plan?
  4. 4. Do they offer regular income options?
  5. 5. Can you change the coverage and premium in the future?
  6. 6. Does the claim consider valid if death occurs outside India?
  7. 7. Which kind of death is not covered by insurance?
  8. 8. Can NRIs take term insurance? If yes, what are the conditions?
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