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Is It Possible To Purchase 2 Term Insurance Plans?

dateKnowledge Centre Team dateFebruary 24, 2021 views231 Views
Is It Possible To Purchase 2 Term Insurance Plans?

We love our families and wish to keep them financially secure even after our time. It is this thought that fuels people into getting term insurance plans and similar policies. However, such plans only allow one beneficiary for the matured amount, which can be unfavorable for families with multiple people needing to be financially secured. Therefore it is a common question among many if it is possible to purchase two insurance plans at a time.

What is a term insurance policy?

The term insurance policy is a life insurance policy that is specifically designed to protect one's family and provide them with financial security in the event of an accident. Like most insurance programs, a person pays a premium. If the person dies at that time due to accident or health reasons, the nominee is guaranteed a death benefit equal to the value of the scheme. Premiums are calculated on the basis of health status, life expectancy, and age of the person.

This is a life insurance policy that provides coverage at a fixed rate for a limited period of time. Although term insurance is much cheaper than investment and insurance products, experts also say that a one-quarter plan may not be enough to cover a person's needs at different stages of his or her life because financial policies may also vary. Therefore, there are reasons why a person should purchase a policy for more than one period during his or her lifetime.

Different growth

Everyone has priorities and goals in life, depending on their stage of life. For example, a 25-year-old person with no major obligations buys Rs. 50 lakh life insurance cover for a 30-year policy period with an annual premium of Rs. 25000. As someone who is in his early stages of leadership, he may not need cover in all his 30 years.

Instead, he can choose a ten-year policy of Rs. 10 lakhs in the annual fee of Rs. 5000 per year, and then move on to a ten-year policy cover of Rs. 25 lakhs in the annual fee of Rs. 15000 per year to pay for child education, housing loans, and income protection. To cover the first years of retirement, he can choose a policy cover for a period of 10 years with15 lakhs in the annual fee of Rs. 10,000.

Small covers

From the example above, it is clear that the policyholder saves Rs.4,50,000 in annual premiums by choosing multiple term policies that are distributed at different maturity periods, compared to purchasing a single 30-year policy.

Many multi-term plans that add to a large cover are cheaper than a one-time insurance plan with a high guaranteed price. Separating mid-term Insurance between multiple insurers is also a good idea if the cover is large, and since discussing the current coverage when buying a new term insurance is mandatory, it will help one choose the best possible option.

To reduce the risk of policy rejection

If the policyholder is honest enough to disclose his or her medical history and has been assessed at the time of purchase, the chances are that the policy application will not be considered. However, there are many cases suggesting that the denial of policy claims is possible or less likely. In such cases, the family of the insurer will be denied on policy claims, and having multiple life insurance plans from different insurers may be helpful.

The total guaranteed amount does not lose the nominee, even if the claim is rejected by one insurer but accepted by another. The nominee may ask the insurance company that rejected the claim to reconsider it. It is wise to classify insurance companies and choose them based on their proven track record of claims, even if they charge extra fees.

Benefits of terms of insurance policy

In addition to providing death benefits to the family of the policyholder, the term insurance policy provides tax-saving benefits under Section 80C of the Income Tax Act. Up to 1.5 Lakhs premiums involving a person, spouse, and children may fall under this category on the basis of any other investment made by each person. Payment of a proposed fee to a nominee is not taxable under Section 10D.

When applying for multiple term insurance plans online, anyone must meet the following conditions:

  • The guaranteed amount cannot exceed the Human Life Value (HLV)

    The value of a person's life is calculated in terms of income, savings, and debt. It is the amount of money that means the loss of income and the increase in debt that a person's family can face in the event of sudden death. HLV allows any policyholder to guarantee the amount that would be required as life cover in the event of the sudden death of the policyholder.

    The HLV calculator determines the best health cover for any person on the basis of a person's profile, savings, debts, and income. Many insurance companies allow ten times as much insurance cover per annum. If the individual's income is eligible for higher inclusion, the subscriber may opt for long-term Insurance. The policy owner, however, must provide proof of annual revenue to obtain multiple policies.

  • The person's health

    If the current policyholder wants to purchase another lifetime policy, another medical test will be required. If the policyholder is in good health, other than in the appropriate income brackets, then long-term insurance benefits can be obtained.

  • Announcement of all existing life insurance policies

    If an existing policymaker wants to purchase another lifetime policy, one must announce all previously purchased policies on the new policy. Failure to declare existing insurance policies may result in the rejection of claims. While claiming term insurance, the general policy is followed by insurance companies in accordance with the guidelines of the Insurance Regulatory Development Authority of India (IRDAI).

Benefits of multi-term Insurance

Multi-term Insurance allows a person to sign up for an insurance policy based on the measures reached by their dependents. These include children's education, child marriage, or any other requirement in the lives of the people they depend on. Some of the benefits of multi-term insurance plans are:

  • Helps to avoid rejection of claims

    Having multiple long-term online term plans can help the policyholder avoid the risk of rejection in the event of sudden death. Even if one insurance company rejects a claim, the policyholder can still have another insurance as an alternative. This is one of the most important benefits of multi-term Insurance.

  • Death benefits from multiple insurers

    In the event of the sudden death of the policyholder, the trustee receives death benefits from most insurers. This ensures that the loved ones of the policy owner have adequate financial resources.

  • Freedom of choice between different insurers

    One can choose insurers with high claims rates to ensure that the individual is not at risk of facing rejection of claims. Different insurance companies have different rates for time policy payments. If one has ever purchased a plan, and the annual insurance statement shows a negative rate of claims, then one can buy another policy on a different insurance policy.

    Canara HSBC Oriental Bank of Commerce Life Insurance supports you in taking on the monthly expenses of your loved ones and providing adequate coverage so that your family can meet their future life goals in your absence with some of the best term life insurance plans.

ULIP

Future Smart Plan
Grow Smart Plan
Insure Smart Plan
Invest 4G
Secure Bhavishya Plan
Smart Future Plan
Smart Goals Plan
Smart Lifelong Plan
Titanium Plus Plan

Traditional

Jeevan Nivesh Plan
Money Back Advantage Plan
Smart Future Income Plan
Smart Junior Plan
Smart Monthly Income Plan
Easy Bachat Plan
Guaranteed Income Advantage Plan
Guaranteed Income Plan
Guaranteed Savings Plan
iSelect Star Term Plan
POS - Easy Bima Plan
Pension4life Plan
Health First Plan

Group

Term Edge Plan
Traditional Plan
Pradhan Mantri Jeevan Jyoti Bima Yojna
Group Advantage Term Plan
Group Credit Secure Plan
Group Secure
Sampoorna Kavach Plan

Term insurance protects the interests of the policyholder in the best possible way. Canara HSBC Oriental Bank Of Commerce Life Insurance offers inexpensive and flexible plans that cover the financial future of your family in your absence.

There is no limit to the purchase of long-term insurance policies and the purchase of a one-time insurance policy. Choosing a life insurance policy is important to adequately cover the changing needs of the individual and his or her family and to fulfill milestones like children's education or marriage, buying a new home at various stages of life.

However, one should be extra careful to pay the highest premiums in the name of multi-term policies. Proper research is the key to avoiding such situations. With the right term insurance plan, one can rest assured about the time after retirement or even demise.

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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 a 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?
  9. 9. Does the term insurance plan have a cash value if you decide to cancel the policy?
  10. 10. Under what circumstances can a term insurance plan be cancelled?
  11. 11. Can I pay the premiums online or make electronic payments?
  12. 12. What will happen to the term plan if the life assured starts smoking after purchasing the policy?
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