Can I Take More Than One Term Plan?

Benjamin Franklin once said, “A policy of life insurance is the cheapest and the safest mode of making a certain provision for one’s family”. And today, most of us would agree. One thing certain in life is that there is always going to be an uncertainty. The sooner we accept it the better. But accepting it does not mean waiting for life to take its course, rather it means to be well-prepared for everything that life throws at you.

When you shoulder the responsibility of a family, your biggest concern is their well-being and safety, and you may often wonder how to provide them with a comfortable lifestyle even if something happens to you. That’s the main reason why we invest in a term insurance policy. With so many benefits of a term plan, you may often feel how good it would be to have multiple term plans. If you have been thinking, “Can I take more than one term plan, here is your answer.

Yes, you can buy more than one term insurance policy, and it is totally legal to do so. The beneficiary of the term plan would be able to make a claim from all the term insurance policies that you have. When you have multiple term insurance policies,  it provides you with an extra protection.

We know that a term insurance is much cheaper than other types of life insurance plans as there isn’t any investment made with your term plan, but then with a cheaper term plan it is affordable to buy some more term insurance policies as it would surely provide more death benefit to your family in case of your death. Let us see some more benefits of having more than one term plan.

•    A Barrier against Claim Rejection
If you have provided your health details correctly and have paid all your premiums regularly, the term insurance company must not reject the term insurance claim, but very often claims do get declined and delayed The family in such a case can also write to the insurance company that has rejected the claim, and they may restudy the case. It is also advised that when you buy  multiple term plans, do it from different companies, but pick the ones that have a high claim settlement ratio, even if they cost a little more.

•    Selection Diverse Term Plan
Rather than buying one 25-year policy, it is recommended that you buy different term insurance plans that have different maturities. By doing this you can help your family cope up better with the fact that financial needs change at every stage of life. For those who prudently align term insurance with life stages, a set of multiple term plan is a smart way as then an individual can carry on or discontinue a term plan as per his requirement.

•    Premiums can be lowered
As you buy multiple term plans that provide small coverage, you automatically decrease the amount of premium, as compared to the premium amount paid for a single and bigger term plan. Thus, when you pay for smaller cover for a number of term plan, the total sum assured as a death benefit adds up and increases the total sum assured.

Things to Remember when buying more than one Term Plan:

As explained earlier, buying more than one term plan is completely legal and allowed by the law. What you need to ensure is that when you apply for a new term policy, you must inform the new insurer about the previously purchased term policy, if any. When the new insurance company is aware of your earlier term policy, they can guide you in picking the right term plan from their products. In case you do not disclose about your previously owned term plan, it might lead to misinterpretation, which can also make your claim get rejected.

Another aspect which should be kept in mind is that the sum assured of all your team policies are not more than the value of your human life. When an individual applies for a term policy, there is an assessment of risk. His/ her medical conditions, the liabilities he/ she has over himself/ herself are aspects which are taken into account and then the individual’s value is decided. The term plan is decided keeping in mind the human life value. Again, here also it is necessary that you furnish only true and honest details about yourself and your lifestyle. For example, if you are a smoker, your sum assured would be a little less as compared to someone who has the same human life value as yours but is a non-smoker. If the insurance company finds any discrepancies, it may lead to rejection of the insurance claim.

A Word of Advice

When you purchase multiple term insurance policies, you must keep it in mind that though the death benefit that your family receives will be big, still the premium has to be paid by you. So, it is advised that you buy only that many number of term plans that you can easily pay the premium of. It might prove to be a little unwieldy to keep a record of too many term policies. So you need to be diligent about making all the payments on time regularly.

Conclusion
An individual buys a term insurance policy, with the main aim to provide a financial security blanket to his family in case of his untimely death. By having more than one term insurance policy you help nullify any odds that may restrict your family from claiming the death benefit.  So, in simple words with more term insurance policies, you basically increase the financial help to your family. You may also instruct one term plan company to issue the death benefit to your family in a lump sum and the other company can do it on a regular monthly basis, thereby ensuring every possible comfort for them, even in your absence.