Losing someone from the family is a loss that can’t be expressed in words. This trauma increases if the person was the bread earner. They say time heals everything, but the emotional trauma can increase as the cushion of financial income is taken away. Therefore, we will not debate over the importance of buying a good term insurance plan, as we know it is a necessity. Instead, let’s discuss how many term insurance plans a person should have.
A term plan is a must-have in everyone’s insurance portfolio as it can effectively cover the policyholder at the lowest cost of the premium. In case of the death of the policyholder, the payout is made to the dependants of the policyholder. A person can take individual policy as well as group insurance policies depending on his/her requirement. It is necessary that a person assess his/her financial needs before deciding whether to buy an individual or group policy.
Yes, you are allowed to have more than one term insurance policy. Remember, if you are buying a second insurance plan, then you must share the information of the first insurance plan with the insurer. In case you are planning to buy a third term insurance policy, the information of the first two policies must be shared with the insurer of the third plan. A smart choice is to select term insurance that provides you with maximum cover at the lowest premium rates.
Why buy two term insurance plans?
You can choose to buy two term insurance plans to ensure the financial needs of your family are fulfilled without any comprise after you. The term insurance policy allows you to have more than one beneficiary for your term plan, and the nominee can be the same for both the term insurance plans you buy. For maximum benefits, you must choose the plans that come with affordable premiums. You can easily compare different plans by using an online term insurance calculator. Apart from providing a larger amount of coverage, there are many benefits of buying two term insurance plans like:
- Additional protection – By subscribing to multiple term policies, you can ensure extra protection for your family in your absence.
- Death claim – In case of death of the policyholder, the beneficiaries of the insured person receive the lump sum payout from the insurance company. The payments on death claim are made based on the terms and conditions of the policy. In case of two policies, a person can choose a plan which has more chances of approving the claim.
- Death benefit – The death benefit received by the beneficiaries is more if there are two policies compared to one.
- Avoiding chances of claim rejection – Coping up with claim rejection is easier if a person has more than one term insurance policy. Even if one insurer rejects the claim, then the policyholder can get it approved from the insurer of the second policy, and this way, the beneficiaries do not have to suffer inconvenience in tough times.
- Comparing claim settlement ratio – The CSR or claim settlement ratio differs from company to company. If you choose an insurance company with higher claim settlement ratio for your second term plan than your first policy then your beneficiaries have higher chance of comparing and getting the claim settled.
- Achieve your goals – Aims and milestones change with situation and age. But to achieve your goals, you need to have peace of mind that even after you, your family will remain financially secure. Term insurance plans will ensure that.