Do you think it will be wrong to own a fleet of cars for your family? It is not if you can afford it. Similarly, if you have more than one life insurance policy, wouldn’t that be better?
With the easy availability and low premiums of term insurance plans, everyone has at least one plan. If you have a growing family, it is an impertinent necessity. One of the term insurance benefits is that your family will always have a financial security cover even in your absence.
Coming back to the question, you can own several cars as a collector. But life insurance plans are not an inventory to start commercial service. Having multiple term insurance plans is only possible with proper financial planning. You should start by arranging your monetary expenses and using the insurance calculator to understand if opting for multiple term insurances is a feasible option or not.
Apart from this factor, there are various other crucial factors to keep in mind before you plan to purchase multiple-term insurances:
Benefits of Multiple Term Insurance Policies
You can opt for two or more term insurance plans to fulfill your insurance needs. It is also possible to have more than one beneficiary for the insurance plan. In case you have two-term insurance plans, there is no stipulation of nominating the same beneficiary to both plans. Moreover, you can choose the best plans with an affordable premium by using the life insurance calculator.
Here are a few benefits of buying multiple term plans:
- Extra Security
Buying multiple term insurance plans is equal to extra protection. But you should clarify the insurers about the availability of multiple plans by your side.
- Death Benefit
Your family will be able to avail of this benefit from more than one policy in the event of your sudden demise.
- Avoid Claim Rejection
A significant advantage is that in the event of claim rejection, your family will not suffer. With multiple term insurances, even if one insurer rejects the claim, your family will have a good chance of having another insurer settling your claim.
- Easy to Achieve Your Goals
Multiple term insurance plans will help you plan according to the milestones in your life. A wise decision would be to subscribe to an insurance plan based on the needs of your family. You can buy your house, secure your child’s future, and other goals with them.
Before you opt for multiple term insurance plans, you should note that it is customary to disclose complete information about the first policy to the second insurer. Likewise, for your third policy, you need to disclose the first and second to the third insurance provider’s details. Otherwise, the misinterpretation of facts can lead to claim rejections.
Before you use the insurance calculator for opting for your second or third insurance policy, you should know that there are specific restrictions to it. For having more than one term insurance, the sum assured of all the insurance policies should not exceed the human life value.
The insurance company will conduct a risk assessment. As soon as you submit a proposal, the insurance provider will go through the underwriting process. It will assess different kinds of health-related risks before determining your premium and sum assured.
Policy for Loan Repayment
If you have to repay a loan of Rs 10 lakh against property in 10 years, you can opt for two insurance policies instead of one policy. You can make use of the insurance calculator and decide upon the new term insurance plan. It will be beneficial to buy one term plan of Rs 10 lakh for 10 years and another term insurance of Rs 40 lakh for 10 years.
Scenario 1: After both the policies have been claimed successfully, it will be possible for your family to repay the loan, and the loan account will be closed. The payout received from the other insurance policy can be used to fulfill their needs.
Scenario 2: One of the policies is rejected by an insurance company due to non-compliance with the insurer’s terms and conditions. In such a situation, you will still be able to repay the loan without any issues.
Claiming Multiple Insurance Policies
Before claiming multiple term insurance policies, you should have complete information ready. All the information needs to be shared with the insurance company. Insurers follow a standard procedure according to the guidelines laid down by the IRDAI (Insurance Regulatory Development Authority of India). The role of IRDAI is to protect the interests of both the insurers and policyholders.
Multiple term insurance policies can safeguard your interests only if you know well about how to choose them. It will be a smart decision to opt for additional term insurance policies. Before you choose any insurance provider, use the insurance calculator to determine the best policy for you. It will provide you a fair idea for managing multiple term insurance policies.