FAQs 186 views November 13, 2018

Term insurance plan ensures financial cover to tackles the economic misfortunes stemming from death. Most customers ask if it is legal and legitimate to possess two term policies. The answer is “Yes”. But, before zeroing on your choice of term insurance, it is important to estimate your family’s needs and gauge the amount your life is worth. This will help you opt for the best term insurance plan that would meet your loved ones’ financial needs in your absence.

However, increasing responsibilities, varying needs, and rising costs may force existing policyholders to re-assess their needs and consider paying for a second term insurance plan too. Remember, while buying a second term insurance plan it is important to disclose and share details of the first term policy or any other insurance plans in force.

Having a second term insurance plan has its own set of advantages. They may be listed as:-

Multiple beneficiaries: Having more than one dependent puts the policyholder in a dilemma about whom to choose as the nominee of the insurance policy. While you may have chosen one nominee of your first term insurance policy, you can enlist your second nominee as the beneficiary to another term insurance plan that you may buy.

Added death benefits: The death benefits corresponding to only one term insurance may not be enough to meet certain unexpected needs. Having another term insurance ensures added death benefits to the nominee(s) of the insured, thus, promising extra monetary protection.

Dealing with claim rejection: There are times when insurers intentionally look for loopholes that can give them sufficient reason to reject the insurance claim. This often happens if death benefits exceed Rs. 50 lakhs. Claim rejection of one term insurance policy can be dealt with in the event of two term insurance plans. Even if, for some unknown reason, one of your term insurance claims gets rejected, your nominee still remains protected with the insurance amount received from the other.

Serve varied needs: Be it children’s higher education, having your own house, children’s marriage including others are important milestones in life that cannot be achieved without money. Untimely death can result in many of them remaining unfulfilled, while also dragging loved ones under the burden of loans taken to attain them. Keeping various milestones and their corresponding requirements, you may subscribe to multiple term insurance policies.

Non-disclosure of details of previous term insurance plans before opting for the next is sufficient reason for insurers to reject the claim. This means that while buying the second term policy, it is important to disclose details of the first policy. This stands true even while buying the third term insurance policy that details of the first two-term policies must be disclosed. Based on the details submitted in the proposal form, the insurer decides if it would like to accept your intent to buy its term insurance policy. Non-disclosure of details amounts to submission of incomplete information, thus, amounting to a rejection of insurance claim.