Simplifying Life Insurance in India
How Many Term Insurance Policies Can You Buy in India?
Can You Buy More Than One Term Insurance Plan in India?
You have the option of purchasing as many term insurance policies as you want in India. The government imposes no such restriction on the number of term insurance purchases as it is entirely up to the insured person.
Also, you have the flexibility of buying these plans from the same or different insurance companies as per your choice. This allows you to handpick the best plan for your family’s financial security after your demise.
There are several advantages that multiple term insurance policies offer you that can prove to be highly beneficial for your family.
What Are the Advantages of Having Multiple Term Insurance Plans?
Increased Coverage
Each insurance policy will provide your nominee with substantial coverage. This will ensure that your nominee can receive more benefits upon your unfortunate demise. They can easily use this money to accomplish their future goals, such as financing a start-up or completing higher education.Easy Claim Approval
The chance of your nominee getting approval for their claim increases significantly. This is so because even if the claim of one policy gets rejected, they have a chance of getting approval for another claim. Also, even if one insurer delays the claim approval, the other insurer can approve it faster.More Rider Options
You can opt for different riders with different term plans. This prevents an increase in the cost of premiums for a single policy. Rather, it evenly distributes the cost of premiums among the policies, thus making all of them equally affordable.Evolution of Policies
With time, the term policies keep evolving to cater to the specific needs of their customers. So you can purchase the latest policy with advanced benefits for increased financial coverage of your family.Serves Different Needs
You can purchase more than one term insurance policy to serve different financial goals for family members. For instance, you can purchase a policy for your children’s education, another to meet their daily expenses, a third to finance their weddings and so on.Ease of Loan Repayment
With increased coverage, your family can quickly pay the instalments of any unsettled debt after your demise. Thus, they will be left with sufficient funds to fulfil their personal needs even after repaying the loan.Multiple Nominee Options
You can change the nominee for different term policies. This will ensure that each of your family members has sufficient funds after your demise. Thus, there will be peace in your family as they will not have to argue over the use of funds that they will be receiving from the plans.More Savings on Premiums
You can avail of tax benefits of up to ₹ 1.5 Lakhs on the premiums of your policy according to Section 80C of the Income Tax Act. This ensures greater savings compared to what you have received on a single policy of the same amount. This money you can use to purchase another policy, or invest for wealth creation.
Moreover, you can increase the advantages of multiple term policies by purchasing them from different insurers.
What Are the Advantages of Purchasing Multiple Term Insurance Policies from Different Companies?
The advantages of purchasing an insurance policy from different companies are as follows:
- It ensures that your nominee receives the claim amount after your death. Even if one company rejects their claim to a policy, they still have chance of getting approval to other policies purchased from a different company.
- Different insurers have various claim settlement ratios. So, you can evenly spread the risk of claim rejections after your demise.
- Plans from different insurers have flexible features and offer a variety of coverages. This is beneficial as your nominee can receive money if at least one among the many policies covers it.
- You will have the flexibility of selecting different combinations of term insurance policies for maximum gains.
There are different types of term insurance policies available that you can combine and select for maximum gains.
What Are the Different Term Insurance Policies Available?
Level Term Insurance Policy
This happens to be the most simple term policy available. For this, you will have to pay a fixed premium amount at regular intervals throughout the duration of your policy. Upon your demise, the nominee will be able to raise a claim for it to use the money as a safety net against a financial crisis.Decreasing Term Insurance Policy
In this type, the sum assured keeps dwindling with the passage of time. Thus, you will have to pay lower premiums at a chosen frequency. This plan would be more suitable for people who are already paying EMIs for a loan to reduce their financial burden.Increasing Term Insurance Policy
You can keep increasing the sum assured of this policy on an annual basis. This will allow you to have increased financial coverage for your loved ones upon your untimely demise. However, the premium of this policy is slightly higher than the level plan.TROP (Return of Premium) Policy
This policy comes with a maturity benefit that is highly advantageous for you. This is so because you can get the premiums of this policy back if you outlive the policy term. Thus you can use this money to meet financial goals.Convertible Term Plans
You can easily inter-convert your term policy into other types of life insurance plans like endowment plans or ULIPs. This is advantageous since you can easily upgrade your plan to get advanced benefits and meet future financial goals.
Additionally, there are certain points that you can keep in mind while purchasing multiple term insurance policies.
What You Should Remember While Purchasing Multiple Term Insurance Policies?
Arranging Essential Documents for Different Policies
It is highly essential to keep the important documents together for each policy. This will be helpful while raising a claim for each. For this, you can make separate folders and name them accordingly to keep the documents safe.Paying the Premiums of Each Policy on Time
It is important to pay the premiums for each policy on time. Any delay can lead to a lapse in the policy. So, you can set a reminder or automate the payment of premiums to ensure that you do not miss any.Updating Information Change for Each Policy
If you change your residential address or mobile number, it is essential that you update the information for all term policies that you have purchased. Otherwise, your nominee might face difficulties while raising a claim.
Now that you know about the advantages, you can buy multiple term insurance policies with sufficient information. Moreover, if you remember the important things to consider, it can be a smart financial decision to buy more than one term policy. However, you must also go through the cons of this practice to make the right decision.
FAQs about How Many Term Insurance Policies Can You Buy in India?:
What are the cons of buying a multiple term insurance policy?
The disadvantages of buying multiple term policies are as follows:
The premium can become expensive, and hence it might be difficult to pay them.
There are chances of missing out on the deadlines for payment of premiums that can lead to a lapse in the policy.
There is a certain limitation on getting the desired sum assured, and it cannot go beyond the Human Life Value (HLV).
What is the minimum income eligibility for term insurance?
What are the documents required for purchasing a term insurance policy?
You will need the following documents while purchasing a term insurance policy:
KYC documents such as an Aadhaar card, Voter ID card, and PAN card.
Age verification documents such as a birth certificate or marriage certificate.
Essential medical reports.
Address proof documents such as utility bills.
Income proof documents such as latest ITRs, Form 16, and last three months’ salary slips last six months’ bank statements.
Is it possible to purchase term insurance policies from different companies?
Other Important Term Insurance Guides
Other Important Articles Related to Term Insurance
Disclaimer
- This is an informative article provided on 'as is' basis for awareness purpose only and not intended as a professional advice. The content of the article is derived from various open sources across the Internet. Digit Life Insurance is not promoting or recommending any aspect in the article or its correctness. Please verify the information and your requirement before taking any decisions.
- All the figures reflected in the article are for illustrative purposes. The premium for Coverage that one buys depends on various factors including customer requirements, eligibility, age, demography, insurance provider, product, coverage amount, term and other factors
- Tax Benefits, if applicable depend on the Tax Regime opted by the individual and the applicable tax provision. Please consult your Tax consultant before making any decision.
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