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How to Decide- How Many Term Plans Should an Individual Have

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How to Decide- How Many Term Plans Should an Individual Have
March 16, 2023

For the sake of financial protection of your loved ones and for meeting desired life goals through a sufficient life cover, a term insurance plan is a must-have for you. A traditional term insurance plan offers complete coverage against the unforeseen circumstances of life and helps you retain your savings corpus. A traditional term insurance plan provides guaranteed primary plan benefits to the policyholder's nominee(s) if she or he dies within the policy term. Although a traditional term insurance plan does not entitle the policy holder to receive the maturity proceeds if she/he survives the plan term, yet there are term insurance plans that come with a return of premium- clause as well. This clause entitles the policy holder to receive the premiums that she/he has paid, once the policy term gets matured. The rate of premium, however, increases with such an option.

When it comes to choosing a term insurance plan, there are several factors which figure in the priority list. A term insurance plan forms an important part of any successful financial portfolio and hence, as an investor, you must know clearly the terms and conditions of the term insurance plan that you wish to purchase. Given the fact that a traditional term insurance plan comes with quite inexpensive and economical rates of payable premium, there are instances where an investor may decide about opting for more than one term insurance plan. In such instances, where the investor holds two or more term insurance plans offered by different insurance providers, there are several benefits that work for their favor.

Following is a list of pros of having more than one term insurance plan:

  1. The probability of claim being entertained increases:

    While choosing a term insurance plan, the claim settlement ratio of the insurance provider is a very important parameter. The claim settlement ratio is the percentage of an insurance provider's claims handled to its total claims received. Needless to say that higher the claim settlement ratio, higher is the probability of your claim being entertained by the provider. If you have taken out more than one term insurance plan from different insurance providers, the probability of your claim being entertained by one provider even if it is rejected by the other one, increases.

  2. Enhanced scope of coverage:

    Having more than one term insurance allows you to have a significant degree of coverage by way of having an extended purview of insurance benefits. This is because the policy holder gets to nominate different persons against the coverage offered by each policy.

  3. Sum assured from more than one policy:

    Having more than one term insurance plan allows you to obtain a guaranteed payout from more than one source. This essentially means that you can have an assured death benefit fund reserve for your nominee(s) from two different sources.

HDFC Life offers various term insurance plans that are aimed at securing your financial future and at ensuring that your loved ones continue to have a reserved financial corpus in place. For details, click on the mentioned link: https://www.hdfclife.com/term-insurance-plans. 

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ARN: ED/12/19/17049

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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Here's all you should know about life insurance.

We help you to make informed insurance decisions for a lifetime.

Difference Between Term Insurance and Life Insurance

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Term life insurance age limit is the age range for buying a term plan. In India, you can start at 18 years, and the maximum age is usually up to 65 years.

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