Many people are eager to know if it is possible to purchase more than one term insurance plan. According to the experts, it is advisable to buy multiple term insurance policies. Before we speak about the benefits of having many term policies, let us first understand – What is term insurance plan?
A term plan is a life insurance policy that insures the life of the policyholder by providing a high sum assured at a reasonable premium. The substantial sum assured ensures the family’s financial security against the uncertainties of life. Even though a term plan offers a large sum assured, the money received may be inadequate to meet your family’s monetary needs, as their goals and priorities may change with time. So, it is recommended to buy more term insurance plans. Here are a few advantages of doing so:
- Varying maturities
People’s financial needs and short and long-term goals differ. Besides this, their milestones change during various phases of life.
For example, a young professional aged 25 has lesser financial responsibilities. He buys a term plan with a sum assured of INR 1 crore for a tenure of 30 years at a yearly premium of approximately INR 50,000. Here, as he has fewer monetary obligations, he may not require a life cover worth INR 1 crore right now. Gradually, he can raise the term plan’s value with the changing life goals. So, for the first 10 years, he can have a term plan with a life cover of INR 20 lakh by paying INR 10,000 as a yearly premium. Later, he can buy an online term plan with a life cover of INR 50 lakh for 10 years at an annual premium ranging between INR 25,000 to INR 30,000 to cover his family needs, their goals, and his liabilities like a car loan and home loan. If he wants to cover the initial years of his retirement, then he can purchase another term plan with a sum assured worth INR 30 lakh at a yearly cost of around INR 15,000 for 10 years.
If you purchase varied term plans that have smaller life cover values, you can save a significant sum on the premium compared to buying a term policy for a longer tenure. Here, the premiums of many term plans will be lesser than a single term plan with nearly the same life cover value. So, as per the above illustration, if you opt for a single term plan, your total premium will be INR 15 lakh (INR 50,000 X 30 years). However, if you invest in multiple plans, the aggregate premium will be the sum of INR 1 lakh (INR 10,000 X 10 years) for the first plan + INR 3 lakh (INR 30,000 X 10 years) for the second plan + INR 1.5 lakh (INR 15,000 x 10 years) for the third policy. Here, the total comes to INR 5.5 lakh. So, overall, you end up saving INR 9.5 lakh (INR 15 lakh – INR 5.5 lakh) in the long run.
- Chances of claim rejection are low
While applying for a term plan, it becomes necessary to provide all the accurate details about your medical history and lifestyle habits. Being genuine with the insurer will lower the probability of your family’s claim being rejected. If you have many term plans from different insurers, your family will not lose the entire sum assured if an insurer denies a claim for any reason. So, you will live peacefully, knowing that you have secured your family’s economic future.
You can buy term plan online at nominal premiums and avail of tax deductions. Use a term insurance premium calculator to determine the money you will have to pay for a suitable sum assured. Invest wisely in multiple term policies and make sure that you do not end up paying exorbitant premiums. A term insurance premium calculator can help you compare the prices of various policies. So, you can easily select a policy that suits your requirements.