Creating a term insurance policy is regarded as a significant decision for building a future corpus. Investing in many term insurance policies, however, is much better. However, when selecting multiple term insurance policies, you must remain open and cautious. Before deciding on one of these plans, you must carefully weigh the benefits and drawbacks, as well as the terms and conditions.
Term insurance has grown in popularity due to its low premium rates and affordability. At various phases of life, a single term plan may be insufficient since financial needs differ. As a result, numerous term insurance plans are recommended for long-term financial security. You can
This is the only condition that must be met when purchasing a new term insurance policy. The underwriter evaluates your total life insurance requirement, takes into account your previous life insurance coverages (term and other life insurance plans), and then determines the amount of coverage you are eligible for. To summarise, you can have numerous Term Insurance Plans in India as long as you disclose them all. Otherwise, your claim may be dismissed due to non-disclosure or misrepresentation of material information. Having various term insurance plans now has numerous advantages. Let’s take a closer look at them to see what we’re talking about.
The Advantages of Having Multiple Term Insurance Policies
The financial goals and priorities fluctuate depending on the stage of life. The goals will undoubtedly alter when you are 25 years old and when you are 40 years old. Under typical conditions, the early stages of life will be devoted to family formation, and later in life, the focus will move to children’s education, post-retirement preparation, and so on. As a result, choosing a term plan based on the current status of current liabilities, which changes over time, is not only critical, but also fits with your changing needs.
Coverage is smaller:
Multiple term insurance policies provide more coverage for less money than a single term policy, and the sum assured is also bigger. If the coverage is needed, diversifying term plans among multiple insurers is also a good idea. The sum is considerable. It’s also crucial to disclose any existing term plans when purchasing new ones.
Reducing the likelihood of claim denial or delay:
The risk of claim denial or delay is dispersed across numerous insurers when you have various plans. Although you are encouraged to provide all factual information at the time of policy initiation, there may be times when you mistakenly withhold certain crucial elements. As a result, the claim is either denied or postponed.With numerous insurers, however, the chances of having the same issues in all plans are slim, lowering the danger of claim denial or delay.
Additional rider benefits:
When you acquire more than one term insurance policy, you can benefit from a variety of riders. The various riders might provide additional benefits to having multiple term policies. Different insurance plans provide different additional benefits, so having numerous plans gives you a wider range of options!,
Every year, the whole life insurance industry changes and evolves. The previously offered benefits are constantly evolving and improving. As a result, an older term insurance plan would have fewer benefits than a new variant from the same or a different insurer.
Most insurers, on the other hand, continue to upgrade older term plan versions, although they are unable to improve the benefits originally provided due to the possibility of a payment modification. As a result, a freshly published term plan would undoubtedly be an improved version of previously chosen plans. This is when the advantage of purchasing many term insurance plans becomes clear, as there is a noticeable enhancement in benefits and coverage features while maintaining price competitiveness!
Higher loan facility:
Another advantageous element when purchasing another term plan is the loan facility. After you buy your first term insurance plan, you might get a business loan, a home loan, or any other longer-term loan. The only reliance on a single term plan may unwittingly deprive its dependents of future benefits. As a result, a supplementary term insurance policy in the amount of the unhedged loan is necessary.
Consider the following:
The only issue with several term plans, particularly those from different insurers, is servicing. This includes everything from premium payments to claims.
- If you have numerous term plans, be sure you pay all of them on time to avoid having your policy lapse.
Tip: Set up an automated withdrawal from your credit card or bank account to make sure your premium is paid on time and without your involvement!
Keep all of your claim paperwork in one place and keep your nominee(s) informed.
Tip: Keep all documents in one file and the details of all documents safely secured in your eInsurance Account (eIA), with your nominee(s) informed of the password so that they It is accessible in the event of your death.
Servicing, such as changing addresses, could be difficult due to the various points of contact for multiple insurers.
Tip: If you alter your address in your eIA, all of your insurers will be notified immediately.
Understanding the Value of Human Life:
Any term plan’s sum insured cannot exceed your Human Life Value, as determined by the underwriter. It represents the buyer’s money value based on his or her income, liabilities, and savings. As a result, before issuing your term insurance plan, the underwriter will evaluate your overall life insurance coverage across all policies.
HLV’s thumb rule can help you understand them quickly. A person aged 18 to 30 years old, for example, could receive 25 to 30 times their annual income from all sources. A person aged 30 to 45 can apply for coverage equal to 20-25 times their yearly income, while those aged 45 to 60 can ask for coverage equal to 15-20 times their annualised income.
This is only an example to help you understand, not a hard and fast law. Each insurer’s underwriter and actuary would have their own internal calculations, and this coverage would apply to the primary insured’s whole life insurance plan! So, in order to select your second, third, fourth, or nth Term Plan, you must provide the following information.