Yes, you can have multiple Term Insurance Policies. While many people are covered by one term insurance policy, multiple policies can be useful after a certain life event to help with your estate planning.
Having a backup plan to safeguard your family's future is more important than ever in today's unpredictable times. A term plan provides an affordable and effective way for you to ensure financial security for your family. When you buy a term plan, you ensure your family's financial future remains secure in case of an unfortunate event. With the right riders, a term plan can also help you after the diagnosis of critical illnesses such as cancer and heart disease.
However, a major concern is whether having more than one term of insurance coverage is appropriate or recommended.
What Is Term Insurance and Why Should You Consider Buying Multiple Term Insurance Policies?
Term insurance is a wise investment that secures the financial future of your loved ones. Having multiple policies can provide better coverage. It's crucial to consider the terms and conditions of each policy before purchasing one and be sure to disclose all previous policies when applying for a new one.
With multiple policies, you can ensure sufficient coverage for changing financial needs at different stages of life. Nonetheless, non-disclosure or misrepresentation can lead to claim rejection.
How to Decide Whether It Is Necessary to Buy Multiple Term Insurance Policies?
It is important to consider a few things when deciding whether more than one term life insurance policy is necessary.
First and foremost is the amount of coverage that you need. It is important to ensure that your family would be taken care of financially if something happened to you. Having multiple policies with different coverage amounts can leave you with sufficient overall coverage.
In addition, determining whether you can afford multiple policies is another thing to consider. On a budget, it might not be possible to purchase more than one policy, and you'll have to weigh the benefits against the cost. Also, you should consider whether you will need coverage for different lengths of time.
Benefits of Getting Multiple-Term Insurance Policies
● Human life value:
Human life value is the amount of money an individual is likely to earn during their lifetime and helps in calculating how much life insurance to purchase. In addition to receiving the combined benefits of both policies, a life insurance policy with a fully human life value will ensure your family gets the full value of your life if something happens to you.
● Additional responsibilities at every stage:
Although term insurance covers you for a limited period of time, as you age, you will experience additional responsibilities as you reach certain milestones. Investing in more than one term plan ensures wholesome protection to deal with these responsibilities.
● Enhancing with a rider:
A rider can help strengthen an existing policy at a nominal additional cost. You can opt for different rider options when you purchase more than one term insurance policy for comprehensive coverage. Term insurance can be combined with multiple add-ons to get the benefits of different policies because each insurance provider has different rider options.
● Increase your chances of successful claim settlement:
You have twice the chance to get a term insurance payout when you have two term insurance policies. If one insurer rejects the claim for any reason, the family can use the second policy to get the sum assured payout.
● Differing Maturities:
You should choose a term plan that aligns with your changing financial goals and priorities as you move through different life stages. Your goals will be different at 25, 40, and 50. A term plan that aligns with your evolving liabilities and requirements will help you make the right decision
● Reduces the chances of claim delays or rejection:
By spreading the risk across multiple insurers, the risk of rejection or delay of claims is reduced. Having more than one insurer reduces the possibility of having the same concerns in all plans, but withholding critical information unintentionally can result in claim rejection or delay. It's essential to disclose accurate information at policy inception.
Conclusion:
When purchasing two-term life insurance policies, you can attain enhanced financial protection and increase your beneficiary’s chances of receiving a claim settlement. Always disclose all information from your existing policy before purchasing another.
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