Can I Buy Multiple Term Insurance for Myself?

Can I Buy Multiple Term Insurance for Myself?

Every Indian household has its own way of preparing for emergencies—medicine kits, fully charged phones, and endless photos for display pictures. Yet, one critical preparation is often ignored: planning for life after death. Most parents avoid writing a will or thinking about what happens if they're suddenly gone. But the reality is harsh—an untimely death can leave families emotionally and financially shattered. Be it a spouse, children, or aging parents, your absence could bring immense hardship. This isn't to scare you, but to urge you to act—get term insurance. Not just one, but multiple plans if needed. It's legal, practical, and responsible.

What are term insurance plans?

Term insurance plans exist to safeguard your family after you’ve died. When the policyholder dies, the money is given to the family. This is known as the death claim and is made according to the terms and conditions of the policy. Though there can be no price tag on human life, this compensatory amount is determined according to the loss in future income. Also, if the person lives on beyond the end of the policy term, no payout is made.

Hence, there are no monetary benefits while you live, but your family is protected through cost-effective premiums because you had the good sense to purchase a term insurance plan. You can have more than 1 beneficiary for 1 insurance plan.

Features of a Term Insurance Plan

Here are the key features of a term insurance plan:

Pure Life Cover: Term insurance provides financial protection to your family in case of your untimely death during the policy term.

High Coverage at Low Premium: It offers large life cover amounts at relatively low premium costs compared to other life insurance plans.

Fixed Policy Term: You can choose the policy duration (e.g., 10, 20, or 30 years) based on your needs and age.

No Maturity Benefit: If the policyholder survives the term, there is usually no payout (unless return of premium option is selected).

Flexible Payout Options: Nominees can receive the death benefit as a lump sum, in monthly installments, or a combination of both.

Tax Benefits: Premiums paid qualify for tax deductions under Section 80C, and the death benefit is tax-free under Section 10(10D) of the Income Tax Act.

Add-On Riders: You can enhance the base policy with riders like critical illness cover, accidental death benefit, waiver of premium, etc.

Convertible Option: Some policies offer the flexibility to convert term plans into whole life or endowment plans.

Multiple Claim Settlement Options: Offers different modes of claim settlement based on family’s preference and financial needs.

Online Availability: Term plans are easily available online, often at lower premiums with simplified documentation.

Can a Person Have Multiple Term Insurance Policies

Yes, a person can have multiple term insurance policies in India. There is no legal restriction on holding more than one policy, and many individuals opt for this approach to enhance their life cover as their financial responsibilities grow. Having multiple policies allows flexibility in coverage based on different life stages and goals. However, it is crucial to disclose all existing policies when applying for a new one, as insurers evaluate your total coverage eligibility based on income and Human Life Value (HLV). In the event of a claim, nominees can receive payouts from all valid policies if disclosures were made honestly.

Benefits of Having Multiple Term Insurance 

Extra coverage

You might already have insurance policies that cover you and your family from different angles (health, auto, travel, employer-provided). However, the amount of these will vary, and most of them won’t be enough to sustain your family through the grieving period and beyond.

Purchasing multiple term insurance plans will ensure that apart from the minimum coverage that other insurance plans provide, your family has a firm and durable safety net to fall on should any unfortunate incident occur.

Also Read:Term Insurance Riders

Rejection

It might be that one of your policy providers straight out refuses to make the promised payout at the hour of the need. This can be due to any of the following reasons:

• The company has packed up and gone home
• You supplied incorrect/ inaccurate/ incomplete information when you filled the proposal
• You did not reveal your health history fully

To keep your family safe from being bereft of the amount they need, you must opt for multiple term insurance plans.

To benefit from maturity covers

Some individuals might find it better to derive the best benefit from term insurance plans by opting  for policies that come with maturity benefits for the different stages of  family life.

Maturity benefit is the lump sum paid to you- the insured- after your policy term is over. This means that if you purchased a policy for 10 years, then at the end of the term, you will be paid an amount that equals the premiums paid plus a bonus. You can use this accumulated amount for your child’s education, marriage, travel, post-retirement, etc. by choosing policies that mature at different times.

Be assured the death risk cover comes with a maturity-benefit policy, too. So whether DOA, you and your family will be secured. Prudence would be to invest in a healthy mix of maturity benefit term plan as well as death benefit term plan. It could be a win-win situation for you. You get back the premiums paid if you live, your family gets the sum assured in the unfortunate event where you don’t. Do note that the premium you pay for a TROP plan (Term with Return of Premium) is slightly higher than a pure Term Insurance plan (which covers only death).

To break down large cover into smaller ones

When you purchase term insurance plans that mature at different times, you are essentially breaking down a large cover into smaller ones.

This is a prudent thing to do because midway, some policy-holders may feel that the need for which they had purchased the policy – say to cover a loan incase something untoward happens to them before the entire loan is paid, and the financial burden on the family is covered through the term insurance claim. But if the loan gets paid and the policy holder see’s no further need of the term plan any more- they might opt to cancel that one particular one.---, surrender their plans.

Hence, opt for multiple term insurance plans that will cover you at different stages, so you are not discouraged at any point to give up while being assured that your family is still secure through the other plan that you want to continue.

Also Read: Nominee for Term Insurance

The Procedure

A crucial first step when going to buy term insurance plans: you have to reveal the details of each of the previously held insurance policies to subsequent insurance companies. If any suspicion or deceit is detected, your claims will be rejected.

After this, a risk assessment process called ‘underwriting’ is carried out. Here, your insurability is assessed based on your income level and your existing life cover. The calculated value is your Human Life Value, and term insurance plans are decided such that the derived benefits do not exceed the value.

Keep in mind, though, that the more plans you buy, the more premiums you have to pay. Hence, figure out the perfect middle ground.

As you can see, the whole process of understanding and answering the question "can i buy multiple term insurance plans" is actually quie simple. Your insurance provider will inform you about any other essential details. For expert guidance and cost-effective premium plans, have a look at Aviva’s comprehensive term insurance plans. No excuse to not have a robust disaster management system in place at your home now.

FAQs on Multiple Term Insurance Plans:-

1. Can you have more than 1 term life insurance policy?

Yes, you can have multiple term life insurance policies in India. There’s no legal restriction, and it helps increase coverage as financial responsibilities grow. Just ensure you disclose all existing policies when applying, as insurers assess eligibility based on your income and Human Life Value. If disclosures are honest, nominees can claim from all insurers. This also offers flexibility and diversification.

2. Is it beneficial to split term insurance coverage?

Yes, splitting term insurance coverage can be beneficial. It allows you to align different policies with various life stages or financial goals—for example, one policy to cover a home loan and another for your family's long-term security. It also provides flexibility to discontinue or modify one policy without affecting the other. 

3. Can we claim 2 term insurances from the same company?

Yes, you can claim two term insurance policies from the same insurance company, provided both policies are valid and all necessary disclosures were made at the time of purchase. Insurance companies allow individuals to hold multiple term plans as long as the total sum assured is within their eligibility based on income and Human Life Value (HLV). In the event of a claim, the insurer will evaluate both policies, and if all terms and conditions are met, the nominee is entitled to receive the combined death benefits from both policies.

4. Is it costlier to take multiple term plans?

Taking multiple term plans is not necessarily costlier, but the overall premium may be slightly higher compared to buying a single large policy due to separate policy charges and administrative costs. However, the difference is usually marginal, and the benefits of flexibility, stage-wise coverage, and diversification across insurers can outweigh the cost factor. Additionally, buying term plans at different life stages allows you to spread out the financial commitment and tailor coverage to your changing needs, which can be more cost-effective in the long run.

Related Articles:

1. Is Term Insurance an Investment or an Expense?

2. Common Mistakes While Buying a Term Plan

Oct 23/19