Life insurance has helped many families stay afloat from uncertainties. It’s a great way to ensure you have enough money, and it can give you a considerable sum assured for a low cost if you choose the right plan. But many people don’t know to what extent their life insurance plans should ideally cover. Many people worry about the constant question of how much life cover is enough. ‘what is life insurance’ It is a contract between the insurer and the insured stating that the former pays a sum assured amount when the latter passes away in an unfortunate manner. But did you know you can have more than one insurance policy?
In reality, there are no limits on how many term plans you can buy. Find out more about it by reading on.
Having more than one life insurance policy can be helpful when:
If your claim is turned down by one insurance company: Your nominee’s claim could be denied for several reasons, such as missing paperwork, giving wrong information about your health history, the insurer having a low claim settlement rate, etc. In these situations, having more than one term plan can protect your family more. With more than one life insurance claim, at least one is likely to pay out and help your family.
If your plan keeps you from adding to your coverage as your life changes: How a person lives and what they need change over time. Most people buy a term policy when they are young because the premiums are the cheapest. At this time, they might not be married or have kids. But as they get older, get married, and have kids, they may need a higher level of coverage. Your family’s needs are likely to change as time goes on. If your plan doesn’t let you add a rider add-on or more coverage, you might want to look into getting a different plan.
You can get the following benefits from having more than one term insurance plan:
- More plans make your family safer. The more plans you have, the safer your family is. Having more than a single life insurance policy can help make sure that your family will always have money to fall back on. They will always have a backup plan in multiple situations.
- More money: Your family has a higher chance of getting more money if you have more than one term policy. They can buy a house, go on a trip, pay off debts, study abroad, start a business, and do much more with this money. They won’t have to worry about money for a long time so they can live comfortably.
- Peace of mind: Having more than one plan for life insurance can also help you feel at ease. If your claim is turned down, your family won’t have to go after the insurance company. They can stop worrying and put the money from the other insurance plan to good use. So, you won’t have to worry about your loved ones when you’re not around because you’ll know they’re safe.
- Tax deduction: Life insurance premiums are eligible for tax deductions in India, based on the law. The maximum deduction you can have is Rs 1.5 lakhs. So, the more premiums you pay, the higher deduction you can claim within the given limit. This benefit varies depending on whether the policyholder has opted for the old or new tax regime. Taxes are always subject to change.
But there are also some cons to having more than one life insurance policy. For example:
- High premiums: It can be expensive to buy more than one life insurance plan. The cost of paying premiums goes up the more plans you buy. This can force you to spend less on other things you need.
- Confusion: It can be hard and confusing to remember when each plan’s premium payments are due. If you don’t pay on time, you could lose your policy. This would be a big loss for you and your family.
Should you sign up for more than one plan?
A term life insurance policy can help protect your family, but it doesn’t come for free. So, it is strongly suggested to look at all of the costs that come with having more than one term policy. To save for the future of your loved ones, you might have to live a tight, cheap life now. This can make you feel frustrated and anxious. So, you should only get more than one plan if you can afford it.
In addition, you should get a clear picture of what your family needs. It should be enough to meet their needs, such as paying for college, paying off debt, covering regular living costs, etc. There’s nothing wrong with having more than one plan, but it should help you in the long run and not get in the way of how you live now. You can use a life insurance premium calculator to figure this out.