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Can a nominee claim from more than one term life insurance policy?

You should remember that term plans pay the money only if the policyholder dies during the term of the insurance policy.

ET CONTRIBUTORS|
Jun 24, 2019, 11.19 AM IST
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A claim cannot be rejected unless there is indication of a deliberate fraud.
My son has bought a term life insurance plan with a Rs 50-lakh cover. Now he is planning to buy another term plan also with a Rs 50-lakh cover. Will his nominee be able to claim from both the plans?
Raj Khosla Founder and Managing Director, Mymoneymantra.com
replies: One can buy multiple term plans and each of these will be honoured by the insurance company. But, please remember that term plans pay the money only if the policyholder dies during the term of the insurance policy. Also, make sure that your son reveals his existing insurance policy to the insurer when he applies for the new term plan. This is important because insurers factor this into their underwriting decision to ascertain that the total cover one has is in line with his financial liabilities. Life insurance has an additional safeguard: after one year from the purchase of the policy, a claim cannot be rejected unless there is indication of a deliberate fraud.

How are group health insurance plans different from regular health insurance plans? Why do they enjoy low premium compared to regular health insurance plans?
Raj Khosla Founder and Managing Director, Mymoneymantra.com
replies: The main advantage of group health plans is that waiting periods, a characteristic of regular health plans, can be waived. This results in considerably higher claim settlement rates. Medical examinations are also not needed. Their premiums tend to be lower because people are insured in large numbers and there is the benefit of scale. The disadvantage of a group plan is that it is renewed every years and insurers or employers may not extend the insurance. In regular plans the law requires insurers to renew the policy lifelong even if the policyholder has made a claim.

I am 45 and looking to purchase a family floater medical insurance plan. I want to buy a plan that allows me to increase my cover on an yearly basis. Please advise and suggest plans.
Raj Khosla Founder and Managing Director, Mymoneymantra.com
replies: While buying personal family insurance, the criteria should be price, claim settlement ratio and exclusion period. Several insurers offer a no-claim bonus, which increases the insured amount each year if you do not make a claim. In fact, some insurers allow you to increase up to 150% of your sum assured. You may consider insurers such as Aditya Birla Health Insurance, Apollo Munich Health Insurance and Max Bupa Health Insurance.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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