Can We Claim 2 Term Insurance From Two Companies

Do We Get 2 Term Insurance from Different Companies?

In a world so unpredictable and a society so unstable, we all aspire to attain the four most important things in life - to live, eat, protect, and secure our family's future. A lot of us buy term insurance to ensure that we have sufficient funds in case of an early death. But one of the big questions is, can we claim 2 term insurance from two companies? The simple answer is yes; you can have multiple-term insurance policies from different insurers. According to statistics, 52% of Indian policyholders hold multiple policies for better coverage. It is an approach that provides a more secure and stable tomorrow for your family and relatives. However, before you choose multiple-term insurance plans, knowing the legal aspects, advantages, and claims process is essential.

All About Term Insurance Multiple Plan

What is Term Insurance?

Term insurance is a well-protected plan that promises financial security to your family in case of unfortunate incidents. It offers a lump-sum amount initiated to the beneficiary, which assists them in managing their bill payments, daily needs, and future requirements. This means that as term insurance policies are cheap and can provide a high coverage amount, many people consider investing in many policies to increase their coverage.

Why Do People Go for Multiple Term Insurance Policies?

• Additional Cover: One insurance cover may be inadequate to meet all your financial obligations. You secure high coverage due to more policies.

• Mitigation of Risk: In case one insurance provider postpones or refuses to pay out a claim, a second policy guarantees that your beneficiaries will still have a financial payout.

• Customization Options: Insurers offer different benefits and riders. You can use multiple policies to cover all your needs.

• Tax Benefits: The premium paid for term insurance policies is eligible for tax deductions under Section 80C of the Income Tax Act.

• Planning for Future Finances: Life circumstances evolve. You can purchase an additional term insurance policy if the desire for coverage increases owing to rising financial responsibilities.

Legal Considerations for Claiming Multiple-Term Insurance Policies

Can You Have More Than One Term Insurance Policy?

If you are doubting, can we claim 2 term insurance from two companies? Yes, purchasing and declaring multiple-term insurance policies is completely legal. However, when you buy a second or third policy, you must keep in mind that you must inform the new insurer about all the policies you have purchased. This ensures transparency between you and the insurance providers so that there are no problems in your claim settlement.

What If You Don’t Have a Policy to Hide?

In such a case, the process can get complicated if the policyholder has hidden existing insurance policies, as you never know if the claim was registered. Claim settlements require insurers to investigate thoroughly. They may deny the claim if they find out about the non-disclosure, leading to financial hardship for your family. Hence, honesty and full disclosure are paramount.

Maximum Coverage Allowed

Insurance companies use the Human Life Value (HLV) to reach a person's maximum coverage. Insurers typically give coverage options up to 20 times your income per year. If your policies’ overall coverage exceeds this limit, insurers may deny applications for new policies.

Advantages of Taking Multiple-Term Insurance Plans

Flexibility in Coverage

It offers the flexibility of coverage with two or more policies. For example, you can have a policy with a longer tenure to secure your family's long-term financial health and another one with a shorter period that covers temporary liabilities like loans.

Restricting Reliance on One Insurer

If an insurer takes time processing a claim, your beneficiaries could face financial trouble. Having multiple policies means you’re not dependent on one insurer and can simplify the claims process.

Customization Through Riders

Insurance providers offer various riders, including:

• Accidental Death Benefit Riders

• Critical Illness Rider

• Waiver of Premium Rider

• Income Benefit Rider

Ensuring comprehensive coverage by combining multiple policies, you can add different riders to tailor coverage to your needs.

Factors to Think About When Buying Multiple Policies

While multiple-term insurance policies may sound good, you need to consider the following aspects before you opt for them:

Affordability

You should not find it hard to pay several premiums. Make sure premium payments are manageable with your other financial obligations.

Claim Settlement Ratios

Before purchasing a policy from an insurer, check its claim settlement ratio (CSR). Higher CSR means the insurer is more likely to pay out claims without hassle. IRDAI’s annual reports contain CSR data.

Managing Documentation

Having multiple policies means more paperwork. Make sure your family knows all policies and where documents are located so there is no confusion during claims.

Summing Up

Because life is unpredictable, we must be prepared today to handle the family's financial stability for tomorrow's unexpected. Investing in multiple-term insurance can be a good option if you inform your insurance agent about your existing insurance and manage the documentation efficiently.  So, can we claim 2 term insurance from two companies? Yes, but only if all the correct steps are taken. By selecting appropriate insurance, ensuring legality, and paying the premiums in due time, you can get more benefits from multiple-term insurance policies and provide the promised financial security to your family they deserve.