Can I have More Than One Life Insurance Policy?

Does Having Multiple Life Insurance Policies in India Make Sense?

Multiple life insurance policies in India can make great sense, especially if your financial responsibilities grow. Different life stages require different types of protection, and one single policy may not always be enough to cover everything.

Is It Legal to Claim From Two Life Insurance Policies?

Yes, it is legal to claim death benefits from two or more life insurance policies. In the event of your unfortunate demise, your nominee can claim the sum assured from all your valid policies, provided all disclosures were made honestly when buying them.

What are the Conditions for Having More Than One Life Insurance Policy?

To buy multiple policies, here are two key rules you must follow:

• Full Disclosure is Mandatory
  You must inform each insurer about the policies you already have. Not disclosing this is considered non-disclosure or misrepresentation and can lead to claim rejection later.

• Stay Within Your Human Life Value (HLV)
  Insurers calculate your HLV, your estimated earning potential over your lifetime, to decide how much total insurance cover you can get. If your existing policies already reach that limit, your request for additional coverage may be denied.

What are the Benefits of Multiple Life Insurance Policies?

Here are some practical reasons why having more than one policy can be beneficial:

• Increased Coverage With Changing Life Stages
  As your salary grows or you take on new responsibilities, like buying a home or becoming a parent, your insurance coverage needs to grow too. Instead of canceling an old policy, many people buy an additional one.

• Risk Diversification
  If one insurer delays or denies a claim (though rare if disclosures are correct), your family can still rely on another policy payout.

• Different Policy Durations
  Life insurance has different types of policies, and each has a separate need. As such, having multiple plans becomes all the more relevant in the case of life insurance. If you are looking for income replacement, a term insurance policy is helpful, while a child plan ensures the security of your child's future. A pension plan helps you build up a retirement corpus, and a ULIP helps create wealth. So, having a combination of different plans ensures proper goal-oriented planning.

• Syncing coverage, premium and financial goals
  Good coverage is essential to compensate for loss in case of premature death. At the same time, the affordability of the premiums and meeting financial goals also have to be considered. While a term plan is affordable and provides good coverage, it does not provide for a retirement corpus or your child's future. Neither can it meet your investment goals, so a pension plan, child plan or a ULIP is required to supplement your insurance requirements.

Note: Know what is term life insurance first and then buy a term plan for your loved ones.

Note: The term plan premium should be calculated using the term insurance premium calculator online tool.

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