Life insurance is a crucial aspect of financial planning, offering protection and security to your loved ones in case of an unfortunate event. While a single term insurance policy can provide coverage, it may not always be enough to meet your changing needs at different stages of life. This raises the question: is it feasible to buy multiple term plans from different companies? The answer is yes. In this article, you will know the risks, benefits, and coverage associated with buying online term plans.
What Is a Term Plan?
Before we discuss more on buying multple term plan, it is important to know what is a term plan. A term plan is a type of life insurance policy that offers coverage for a specific period or ‘term’. It provides financial security to your loved ones in case of any unforeseen circumstances. Term plans are known for their affordability, as they offer high life cover at lower premiums compared to other life insurance policies.
Why Consider an Online Term Plan?
Term plans are available both offline and online. Online term plans have gained popularity due to their convenience, competitive premiums, and flexible features. You can easily compare different plans, calculate premiums, and apply for coverage from the comfort of your home.
When it comes to securing your family’s financial future, an online term plan is one of the most affordable and effective options available. A term plan provides life cover for a specified period, and in the unfortunate event of the insured person’s demise during the term, the insurance company pays a predetermined sum of money to the beneficiaries.
Differing Maturities for Different Life Goals
Each individual has unique life priorities and goals that change over time. If you are an young individual without major responsibilities, you may opt for a 10-year term plan with lower coverage and premiums. As you progress in your career and start a family, they can choose another term plan with higher coverage to protect your loved ones financially. Finally, nearing retirement age, you can opt for a term plan that covers your needs during those years.
By spreading the coverage across different maturity periods and opting for varying sums assured based on specific life goals, you can save on premiums and ensure comprehensive coverage throughout your lives.
Pros and Cons of Multiple-Term Policies
Here are the various pros and cons of buying multiple-term policies:
Pros
Some of the key pros are discussed below:
Flexibility: You have the freedom to customise your coverage according to your evolving needs by selecting multiple policies with varying terms and covers. if you have financial dependents for a specific period, you can choose a higher sum assured for that duration.
Better Cost Optimisation: Opting for multiple policies can help you optimise costs by tailoring coverage based on changing financial obligations. You can avoid overpaying for coverage that may no longer be necessary.
Diversification: By purchasing policies from different insurance providers, you spread the risk across multiple companies. This diversification offers an additional layer of security in case one insurer faces financial difficulties.
Cons
Complexity: Managing multiple-term policies requires careful record-keeping and diligence to ensure all premiums are paid on time. It also involves juggling various policy documents and renewal dates.
Premium Payment Burden: Buying multiple-term policies means paying premiums for each policy, which can increase your overall financial burden. It is essential to assess your budget and ensure you can comfortably afford the premiums of all policies.
Reducing the Risk of Claim Rejection
Claim rejections by insurance companies are rare but can be devastating for the policyholder’s family. By holding multiple-term policies from different insurers, the risk of losing the entire sum assured due to claim rejection is minimised. Even if one insurer rejects a claim, the nominee can still receive the sum assured from another insurer. It is important to choose insurers with a proven track record of high claim settlement ratios and disclose all existing term covers while purchasing new ones.
Benefits of Additional Riders
One advantage of having multiple-term policies is the ability to add additional riders to specific policies. Riders offer extra benefits such as accidental death cover, critical illness cover, and disability cover. By opting for additional riders on certain term policies while keeping others without any riders, policyholders can tailor their coverage to their specific needs.
Planning for Children’s Education
As young couples when you plan for your child’s education in the future. You decide to purchase multiple-term insurance policies to ensure financial security for your child’s education. By purchasing multiple term plans with varying coverage and terms, you will be able to create a safety net that covers your child’s education expenses even if one policy expires before the need arises.
Conclusion
It is feasible to buy multiple-term plans from different companies online. By aligning the coverage and terms of insurance policies with specific life goals and milestones, you can ensure comprehensive protection for yourself and your family. Be cautious not to pay exorbitant premiums in the name of multiple-term policies.
Remember, when considering buying multiple-term plans, it is crucial to assess your financial requirements at different stages of life and choose insurers with high claim settlement ratios. By doing so, you can provide your loved ones with the security they deserve while optimising your premium payments. As you explore various online term plans take the time to understand what term insurance entails
