Can We Take Multiple Term Insurance Plans?

Quick Overview

Many people purchase multiple term plans to build higher coverage, diversify insurers, or align different policies with different life goals.

Additionally, there is no legal cap on the number of term plans you can own. Indian insurers and IRDAI rules allow this, as long as your total cover matches your income, existing insurance cover, and financial needs.

However, the term coverage should not exceed your human life value (the monetary value of a person's life).

Buying more than one term insurance plan can sound confusing. Should you split your term cover or keep it simple with a single policy? This guide explains why some people choose multiple term plans, where it can be beneficial, where it might backfire, and how to determine what works best for your long-term responsibilities.

Why Do People Need Multiple Term Policies?

Better Coverage Planning

You can align each policy with a specific goal. One policy can cover loans, another can protect family expenses.

Staggered Policy Terms

You can let one policy end when a home loan closes and keep another running longer for family support.

Insurer Diversification

Spreading coverage across insurers reduces dependency on a single company during claims. Although if one insurer rejects your claim based on valid grounds, a second insurer might also do the same.

Flexibility Over Time

If your income/liabilities grow later, adding a new policy may be easier than modifying an old one.

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What Are the Drawbacks of Having Multiple Term Plans?

Multiple term policies can make claims harder for your nominees. In case of death, your family must file separate claims with each insurer.
There are several underwriting and cost concerns. Insurers assess your total coverage based on your human life value (usually 20–30 times your annual income). If your combined cover looks too high, new applications may face extra scrutiny or rejection.
Multiple term policies often overlap benefits, which means paying higher premiums without getting meaningful extra protection.
Multiple policies increase the risk of errors. Tracking different premium dates and policy terms can also lead to missed payments or lapses. If all existing policies are not disclosed correctly, insurers may reject claims later.

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Key Considerations Before Buying Multiple Term Insurance Plans

Total Coverage vs Income

Insurers look at your overall life cover across all policies. If the total amount looks too high compared to your income, your application may face questions or rejection.

Disclosure is Mandatory

You must declare all existing and pending term policies when applying for a new one. Non-disclosure can lead to claim rejection later.

Policy Terms and Ages

Different plans may end at different ages. This is useful only if planned well. Random terms can leave you underinsured later in life.

Claims Experience

Your family will need to file claims with each insurer separately. Simpler structures are easier to manage during stressful times.

Cost Efficiency

Buying multiple small plans later in life usually costs more than buying sufficient cover early through one well-planned policy.

Let’s Consider an Example

If a 25-year-old (non-smoker male) buys a single Axis Max Life Smart Term Plan Plus with a ₹2 crore sum assured till age 70, he pays about ₹18,400 per year.

If he splits the same cover into two ₹1 crore plans, he needs to pay ₹10,459 for each respectively. Hence, he ends up paying an additional ₹2,518 for two separate term plans.

Alternatively, if he buys two term different plans (e.g., HDFC Click2Protect Supreme and ICICI iProtect Smart Plus), the combined premium comes to ₹22,434, which is ₹4,034 more for the former ₹2 crore term coverage.

Recommended Term Plans for Multiple Term Policies

If you are looking for multiple term plans, we suggest you may go ahead with comprehensive plans like Axis Max Life Smart Term Plan Plus or Bajaj Life e-touch II. These plans offer excellent coverage and have strong track records over the years.

Explore more such plans and look at how our experts evaluate them through Ditto’s cut.

How Does the Claim Process Work with Multiple Term Plans?

If you have multiple term plans, each insurer processes the claim independently. In this case, your nominee must inform all insurers and submit separate claim forms and documents.

Additionally, each valid policy pays its full sum assured without any reduction.

For example, if you hold two term plans of ₹1 crore each from different insurers and pass away during the policy term, your nominee can file claims with both insurers and receive a total payout of ₹2 crore, subject to claim approval.

Note: The claim process also depends on whether you bought your term plans from a single insurer or multiple insurers. In the case of the latter, the paperwork for such claims can get more complicated.

Thus, keep a simple “policy folder” (insurer documents, nominee details and so on) that your nominee can find when required.

Why Choose Ditto for Term Insurance?

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Should You Go for Multiple Term Insurance? Ditto’s Take

Multiple term insurance plans make sense only when there is a clear reason behind them. At Ditto, we see this approach working well in these cases:

You bought a small term plan early in your career and need additional coverage later due to a growth in your income and responsibilities.
You want to align different covers with specific liabilities, such as home loans or business loans.
You may prefer staggered policy terms instead of one long policy. For example, a single term plan until age 60 can cover a home loan, while another until age 70 can support your children’s education.

However, we recommend buying a comprehensive term plan if you have enough financial resources. A single large policy is easier to manage with just one premium, one claim process, and one nominee setup.

Multiple policies increase paperwork and coordination, and the higher combined coverage can also lead to extra scrutiny or medical checks from insurers.

Frequently Asked Questions

Can I have multiple term insurance policies at the same time?

Yes. There is no legal limit on the number of term policies you can hold, as long as the total coverage matches your income and financial profile.

Do I need to disclose existing term policies when buying a new one?

Yes. Full disclosure of all existing life insurance policies is mandatory. Not declaring existing policies can lead to claim rejection later.

Will all term policies pay out if a claim occurs?

Yes. Each valid policy pays its full sum assured independently, provided all disclosures were correct, and policy terms are met.

Does having multiple term plans increase premiums?

Yes. Buying multiple smaller plans usually costs more than one well-structured large policy, especially if purchased at different ages.

Is it better to buy multiple term plans from the same insurer?

Buying multiple term plans from the same insurer can help simplify claims because nominees deal with one insurer instead of several, reducing paperwork and delays.

Last updated on: 20 Dec, 2025