Term insurance is one of the most affordable ways to ensure your family’s future is financially secured. Its comparatively low premiums make it an easy and cost-effective addition to your financial plan. What’s more, you get the assurance that your near and dear ones’ future is certain, regardless of any unfortunate events.
The affordability factor of term insurance means that you can opt for more than one plan. This can largely increase the financial security your family receives. In such a case, you may be wondering if we can claim 2 term insurance payouts from two companies. Yes, it is possible to do so. Let’s look at it in detail.
Understanding Multiple Term Insurance Claims
Prevailing laws in India allow you to buy more than one term insurance plan. Doing so can benefit you in many ways. Mainly, it will ensure a higher total payout for your loved ones in your absence.
So, if you are wondering how we can claim 2 term insurance payouts from two companies, here are some key points to keep in mind:
- Inform the insurance company of your existing policy and total coverage when you buy a new plan. Do not conceal important information from the insurers. This will help you avoid claim rejection in the future.
- In addition, also inform your loved ones of all your term insurance plans. If you have separate nominees for each term insurance plan, each of them will have to file the claim for their respective policies. The nominee must fill out the death benefit claim form and submit the required documents to be eligible to receive the payout.
- If you have an accidental death benefit rider in term insurance, you will have to provide an FIR (First Information Report) from the police authorities.
Benefits of Raising Term Insurance Claims from Multiple Insurers
Now that you know you can claim 2 term insurance payouts from two companies, let’s look at the benefits you can enjoy as a result:
A Higher Payout for Your Family
The main motive for buying term insurance is to make sure your family does not suffer financial stress in the future. The higher the total payout from term insurance, the better financial support your family will receive. You can also opt for a plan with a higher sum assured, like a ₹1 crore term insurance plan, to provide more cushioning for your family.
More Tax Benefits**
For the uninitiated, the death benefit payout from a term insurance plan is exempted from taxation. These tax benefits will allow your family to receive the full payouts from both (or more) plans without worrying about tax outgo.
Plus, life insurance premiums can be used to claim tax deductions as per prevailing tax laws. Thus, you can opt for multiple term plans as a part of your retirement planning portfolio or tax-saving strategy.
**Tax exemptions are as per applicable tax laws from time to time.
What to Know Before You Buy Your Second Term Insurance Plan
The benefits of having more than one term insurance plan are clear from the above section. However, before you opt for your second plan, it is important to be clear about a few things.
The Premiums Should be Within Your Budget
More coverage often means a higher premium. So, if you are planning to buy a second term insurance plan, check its premiums first. Use a term insurance calculator for this purpose. It is advisable to go ahead with multiple plans only if the premiums are within your budget.
Opt for Different Features/Benefits in Your Second Plan
Having diverse term insurance coverage leads to all-round protection for you and your family. Hence, your second plan should have different features or benefits from the previous one. So, if the first one is a decreasing term insurance plan, the other one could be an increasing term plan. Similarly, if one is ₹10 lakh term insurance plan, the other one can be of a higher amount, such as ₹75 lakh term insurance.
Avoid Over-insurance
Even if term insurance is affordable, it is advisable to avoid opting for more coverage than necessary. Over-insurance is unnecessary and may lead to loss of money in the long run. Opt for high sum assured amounts and life insurance riders only if necessary.
Conclusion
Having multiple term insurance plans and raising claims from separate insurers can be beneficial. With support from multiple plans, you and your loved ones can have better peace of mind and live a life free from financial stress.
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