For the complete financial security of your family, you can buy more than one life insurance policies. Let’s have a look at how a death claim can be made in multiple life insurance policies.
First, understand what death claim in a life insurance policy is?
In case of unfortunate demise of a policyholder during the policy tenure, his/her beneficiary is entitled to get a payout, which is called death benefit. Death claim in a life insurance policy can be filed as per the terms and conditions of the policy.
Is it authorised to buy multiple life insurance policies?
Yes, it is completely legal to purchase more than one life insurance policy only in the following scenarios:
You have disclosed all the material facts
When you apply for a second life insurance policy, it is imperative to disclose all the previously bought life insurance policies so that the new insurer is cognizant of the already existing coverage and can help you choose the right cover. In case you fail to do so, it can result in misrepresentation, which can also lead to the rejection for a death claim.
The total sum assured of all the policies is not more than human life value
When a life insurer receives the application form from the prospective customer, a process of risk management, which is called, ‘underwriting’ starts. Under this, the insurability is accessed on the basis of the applicant’s income and current life cover. On the basis of these details, the insurer will compute human life value. In any case, total death claim in a life insurance policy can’t exceed human life value.
Advantages of holding multiple life insurance policies
Multiple life insurance policies act as a hedge against the claim rejection. While full disclosure is all that requires to ensure the claim will be settled by the life insurer, still things can go awry. The last thing you would want is the insurer rejects the claim and your family has to suffer due to this. To combat this situation, you can easily spread the risk by taking multiple policies from different insurers.
Our advice
Undoubtedly, buying multiple life insurance policies means paying an additional premium. Moreover, it means, you have to keep track of multiple life insurance policies. Still, you can buy as many life insurance policies as you want, provided they secure the financial life of your family.
The purpose of life insurance is to give financial security to your family even in your absence. So, whether you buy one policy or multiple, the policies should work only towards giving financial security to your family when you are not around.
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