Can Term Insurance Be Claimed From Two Companies

Can Multiple Term Plans be Claimed from Two Companies?

Individuals can claim multiple-term insurance policies to ensure comprehensive financial protection for their families.

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Written by : Nitin Bhatia

Reviewed by : Akanksha Gangvany

Akanksha Gangvany

2021-02-03

1093 Views

7 minutes read

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In India, an individual can claim multiple-term insurance policies to secure adequate coverage for their families.

Term insurance provides financial security without the primary earner, offering essential support to the family members. Responsibilities grow with the passage of time. Thus, to protect your life goals, you may need to review your term insurance plan from time to time. There may be a need to buy another term insurance plan to protect your goals.

A lot of people do inquire can we claim 2 term insurance from two companies? The answer is Yes! Insurance companies allow customers to buy multiple insurance plans depending on their requirements.

If you have two term life insurance plans and are here to find the answer, can I have multiple-term insurance? You are on the right page. Read this blog to understand the advantages and disadvantages of having multiple plans.

Table Of Content:

Advantages of Having Multiple Term Insurance Plans

A term insurance policy is a cost-effective way to provide financial protection to your family when you are not around anymore. Sometimes, a single-term plan may not help you meet all your needs. For adequate protection, you may add another term plan to your portfolio. However, having multiple-term life insurance plans may also have some disadvantages. 

Having multiple-term plans has various advantages that are listed below:

1. The coverage needs to increase with increasing responsibilities - One term plan may not be sufficient

Growing responsibilities will demand a higher need for protection. The existing term insurance plan may not be sufficient for your increasing obligations. 

For example, you had bought a term plan with ₹50 Lakh cover when you started earning. A few years later, you got married, and you added your spouse to the same policy. After a few years, you both become parents, and your responsibility increases. You feel that the same term insurance plan is not sufficient to act as a financial umbrella for your family if something happens to you. You buy a new plan for sufficient coverage. 

So, having multiple-term insurance plans will fill the gap between your coverage needs and the increase in responsibilities.

Did You Know?

When buying multiple-term plans from different companies, your coverage is often capped by the Human Life Value (HLV) estimate.

Claim Settlement Ratio

2. Higher chance of successful claim settlement

While filing the proposal form for a term plan, you shouldn't hide anything as it might lead to rejection in the issuance, or it may create issues when the beneficiaries claim the benefits. However, the claim could be rejected by the insurance company due to any reason. If you have more than one term insurance plan, your family may get the benefit from the other insurance company.

3. Chance to enhance the term plan with riders

Riders are optional in-built features that a policyholder may add to their policy to enhance the coverage. Adding riders to the plan will increase the premium as it is enhancing your plan. 

Let us consider an example to understand this. Suppose the term insurance plan that you have offers disability coverage but doesn't include critical illness coverage. Having critical illness coverage will be beneficial for you in the future. Buying a term plan with critical illness cover will help you financially. And by having multiple-term plans, you have comprehensive protection.

Disadvantages of Having Multiple-Term Insurance Plans 

However, having multiple-term life insurance plans may also have some disadvantages. Weighing the pros and cons before you buy two policies will help you understand your financial needs and the gaps in fulfilling them.

Listed below are a few limitations of buying multiple policies:

1. Have to pay more for multiple life insurance policies

You will have to pay a certain premium for every policy you buy. If you have 2 term insurance plans, you will pay for both plans. In the end, it may cost you more.

2. Managing multiple life insurance policies may be challenging

When you have multiple plans, you have to pay multiple premiums. That means remembering multiple premium payment dates. Sometimes, you may miss a payment date. This is an additional hassle that you will have to manage if you have more than one life insurance policy.

Buy 1 Crore Term Insurance Plan 

Buying a 1 crore term insurance plan is the best way to build an adequate financial corpus for your loved ones. Opting for a 1 crore (CR) coverage amount offers several advantages that are listed below:

1. Sufficient Financial Protection

A 1 crore term plan provides a substantial sum assured to safeguard your family's financial future in the event of untimely demise. This amount can cover various expenses, including outstanding debts, daily living expenses, children's education, and other financial obligations.

2. Cost-Effective Premiums

Compared to higher coverage options, a 1 crore term plan typically offers more affordable premiums. It makes term plans accessible to individuals with varying income levels and budgetary constraints.

3. Tailored to Individual Needs

A 1 crore term insurance plan can be customised to suit your specific requirements. You can adjust the policy features, term length, and additional riders according to your family's unique needs and circumstances.

4. Long-Term Financial Planning

This coverage amount aligns with prudent long-term financial planning, offering peace of mind and financial security for your family's future. 

If you are wondering how many term insurance can I have, you can check the numerous plans available. iSelect Smart360 Term Plan from Canara HSBC Life Insurance provides comprehensive protection for your life goals at an affordable premium. The plan offers life cover till 99 years with a high sum assured at a nominal rate. This plan provides coverage against 40 listed critical illnesses and terminal illnesses.

Final Thoughts  

Now that you have got an answer to your question: can I have multiple-term insurance? You must consider both pros and cons to make a mindful decision. Acquiring multiple-term insurance plans can offer flexibility to adjust to evolving life circumstances, such as increasing expenses, debts, or changing life goals. Additionally, the availability of built-in and optional riders can enhance the comprehensiveness of your coverage, provided the plan supports them. However, it's crucial to be mindful of the aggregate sum assured limitations, which may be influenced by your annual income. Before making a purchase, it's advisable to consult your insurer to ensure compliance with these restrictions.

By adopting a strategic approach to managing multiple-term plans, you can maximise the benefits while minimising potential complications in the event of a claim.

Glossary:

  • Optional Riders: These are additional features that can be added to an insurance policy to customise coverage according to specific needs or circumstances.

  • Disability Coverage: Disability coverage provides financial protection to individuals who cannot work due to a disability. It covers income replacement and sometimes additional benefits to support living expenses.

  • Critical Illness Coverage: The coverage offers a lump-sum payment upon the diagnosis of a predetermined serious illness outlined in the policy. This payment aids in covering medical expenses, loss of income, and other costs incurred due to the illness.

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FAQs Related to Multiple-term Insurance

Yes, you can claim life insurance from two different companies. Each insurer will independently assess and process your claim based on your policy terms. While claiming the life insurance, you must provide the necessary documents and follow the claim procedures outlined by each company to expedite the process.

Yes, having multiple insurance policies can impact your premiums. While buying policies with the same insurer may lead to discounts, having multiple policies across different insurers could increase overall premiums compared to a single policy. 

To initiate the claim process, you must contact each insurance company separately. Provide policy details and relevant information, following the specific procedures outlined in your policy documents. Also, you must stay proactive and communicate with insurers to ensure a smooth claims process.

Yes, informing all your insurance companies about your intention to make a claim is crucial. Notify each insurer separately and provide the relevant details to ensure smooth claim processing.

In India, you can have multiple-term insurance plans to establish financial security for your family. The number of policies you can choose depends on numerous factors like coverage needs, financial stability, health, age, etc.