Is It Possible To Buy 2 Term Insurance Plans?

We love our families and wish to ensure their financial security even after we're gone. 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 unfavourable 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. The answer is yes, and in many cases, it might be the smarter option.

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 programmes, 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 their life, because financial policies may also vary. 

Why One Term Plan May Not Be Enough?

Life isn’t static. Your financial needs and goals, like marriage, children’s education, home loans, and retirement, evolve over time and bring new responsibilities. One single policy might not fully accommodate this progression.

Here are some of the 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 ₹50 lakh life insurance cover for a 30-year policy period with an annual premium of ₹25000. As someone who is in his early stages of leadership, he may not need cover for all his 30 years.
  
  Instead of buying a 30-year policy for ₹50 lakh at ₹25,000 per year, he structured his term cover like this:
  
  
  1. ₹10 lakh cover for 10 years at ₹5,000/year (early career stage)
  2. ₹25 lakh for the next 10 years at ₹15,000/year (child education, home loan)
  3. ₹15 lakh for the final 10 years at ₹10,000/year (retirement cushion)
• Small covers: From the example above, it is clear that the policyholder saves ₹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 their medical history and has been assessed at the time of purchase, the chances are that the policy application will not be rejected. 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 change for 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 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:

1. 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. 
2. 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. 
3. 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 term 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.

Important Considerations Before Buying Multiple Term Plans

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. Human Life Value 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, they 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).

Conclusion

Term insurance protects the interests of the policyholder in the best possible way. Canara HSBC 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 fulfil milestones like children's education or marriage, and buying a new home at various stages of life.

However, one should be extra cautious when paying the highest premiums for 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.