What are term insurance plans?
Term insurance is the protection that you can secure not just for yourself but also to make sure that your family is cared for. As you start working your first job, it is vital that you design your life goals in a manner where you are able to set aside specific funds where your life goals can be met, especially to care for your family.
You can purchase term insurance and customize it to include a cover for any unforeseen outcomes like critical illnesses or disability at a nominal extra cost, as per your requirements, thereby ensuring that your financial losses are minimal in case you were to contract any critical illness or suffer from a disability. Term insurance plans offers adequate coverage at premiums that are affordable. You can avail of the protection from critical illnesses that are covered within the plan as well. In fact, you can ensure that your protection is increased by opting for multiple add-on covers like Accidental Total Permanent Disability Benefit, Accidental Death Benefit, and even a Waiver of Premium Benefit at additional cost, all of which can prove especially helpful during the time of financial distress.
Can I claim multiple term insurance plans?
It is possible to claim your sum assured from more than a single term insurance plan. In fact, if you want to be careful it is recommended to buy more than a single term plan, as long as you can afford it with ease.
When it comes to claiming more than one term insurance plans though, there are certain conditions that need to be fulfilled. These are as follows –
1. The Sum assured on multiple term insurances cannot go over the HLV (Human Life’s Value)
HLV or Human Life Value is the monetary value of an individual’s life based on their savings, income, and liabilities. It is also the monetary value that denotes the increase in liabilities and the loss of income that an individual’s family would experience in case of their sudden demise. HLV allows any policyholder to ascertain the amount needed as a life cover, in the case of their sudden death.
In fact, similar to a term plan premium calculator, an HLV calculator will determine the estimated life cover, which is generally supposed to be ten times the annual income the individual has. In case the individual’s overall income makes them eligible for a higher coverage option, the subscriber can then opt for multiple term insurances. However, the policyholder has to provide proof of their annual income to be able to avail multiple policies. However, the sum assured of all the policies cannot go over the HLV.
2. Health of the individual
In case an existing policyholder wishes to purchase a second term insurance policy, another medical test will be needed. If the policyholder is in good health, in addition to falling within the suitable income bracket, the benefits of multiple-term insurances can be availed of.
3. Declaration of all existing term insurances
In case an existing policyholder wishes to purchase a second term policy, one has to declare all of their previously purchased policies to their new insurer. The failure to declare any pre-existing term insurances may likely result in a rejection of claims.