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Financial Planner - Answered on Apr 08, 2024

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Asked by Anonymous - Apr 05, 2024Hindi

Can I buy two or more than two term insurance policies from different insurance companies? What are the advantages and disadvantages of doing so?

Ans: Yes, you can absolutely buy two or more term life insurance policies from different companies. In fact, it can be a good strategy to get the coverage you need. Here's a breakdown of the pros and cons:

Advantages:

• Increased coverage: If you need a high death benefit amount, one policy might not be enough. Having multiple policies lets you reach your target coverage amount.
• Tailored coverage: Different companies offer different features and benefits. You can pick plans from various insurers to get the specific coverage you need, like an accidental death benefit rider on one policy and a waiver of premium rider on another.
• Competitive rates: By shopping around, you can potentially find better rates for your coverage needs from different insurers.

Disadvantages:

• Higher cost: You'll be paying premiums for multiple policies, which can add up.
• More complex management: Keeping track of multiple policies and renewal dates can be cumbersome.
• Potential for claim issues: While unlikely, if you have multiple claims, beneficiaries might need to deal with multiple insurance companies during a difficult time.

Here are some additional things to consider:

• Total coverage amount: There might be a limit (called human life value) on how much life insurance you can get based on your income and financial obligations.
• Disclosure: Be upfront with each insurer about your other policies.

Overall, having multiple term life insurance policies can be a good strategy, but it's important to weigh the pros and cons carefully. If you're considering this route, talk to a financial advisor to determine the right amount of coverage and find the best plans for your needs.

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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Question by Loveneesh - Jun 03, 2021Hindi

I am 47 years old businessman. I have a query regarding term insurance plan. How many term plans can a person buy? I mean if I have more than 1 term plan then will my nominee get claim from all of them or is there a limit to it?

Ans: There are no specific limits to the number of life insurance policies (including term covers) you can own and you can claim benefit from all of them. However, the insurance companies seek a disclosure of the other insurances you hold at the time of submitting your application form, which they use for financial underwriting.

You can also have different nominees or same nominees for all these plans. The nominee will get a benefit whether it is one policy or more than 1 policy.

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