Can Term Insurance be Claimed From Two Companies?

Raj, a 35-year-old businessman, needs to repay his home loan of Rs. 75 lakhs in the next 10 years. He also has other financial responsibilities like saving up for his children’s higher education, wedding, etc. He wants to make sure that these obligations are met whether or not he is around. So, he decides to purchase term insurance that can secure his family as well as cover their financial goals and outstanding debts.

He purchases two term insurance plans of Rs 1 Crore each, at different life stages, in accordance with his growing needs and responsibilities. So, if Raj passes away during the policy period, his nominee is eligible to receive the death benefit under both plans.

However, can term insurance be claimed from two companies? Let’s find out in this article.


First, What is Term Insurance?
If you are the primary earner of your family, your loved ones will be entirely dependent on you for their lifestyle and dreams. If something were to happen to you, this would be both emotionally and financially devastating for them. How do you protect them from the money problems that will arise in your absence?

This is where a term insurance plan steps in. A term insurance plan is a pure risk protection plan that provides financial security to your family if you pass away during the policy term.

The insurer pays a fixed sum of money called ‘sum assured’ to your loved ones as the death benefit. It acts as an income replacement that will help them to meet both short-term and long-term financial goals from paying rent to taking care of your child’s tuition and wedding. The money will be paid out per the claim payout option chosen by you during the policy purchase.

However, keep in mind that you won’t receive any benefits from the policy if you survive the policy term.
 

Can Term Insurance Be Claimed From Two Companies?
If you have purchased term insurance plans from two different insurance companies, your nominee can claim from both of them in case you pass away during their policy tenures.
 

How Can Your Nominee Make Two Claims In Your Absence?
Your nominee should ideally have an understanding of how the claims process works for both insurers. Here’s a quick summary of the steps that they will need to follow -

Step 1: Notifying The Insurers
In case of your sudden demise, your nominee will have to inform both insurers about the same without any delay. They can get in touch with the insurer by -

• Calling the company's toll-free number
• Email
• Visiting the insurance company’s website or
• Visiting the insurer’s nearest branch office.
   

Step 2: Document Submission
Once the insurers are notified about your death, your nominee will need to submit -

?A duly filled out claim form to support the claim. They can get the claim form either from the insurer's website or their branch         office.

?The required documents. Here’s an indicative list of the documents that your  nominee will need to submit -

✏️In case of a natural death

1. Policy certificate
2. Death certificate by the local authority
3. Address proof of the nominee
4. Photo identity proof
5. Cancelled cheque
6. Copy of bank passbook
7. Copy of medico-legal cause of death
8. Medical records (Admission notes, Discharge / Death summary, Test reports, etc.)

✏️In case of an unnatural death

1. Policy certificate
2. Death certificate by the local authority
3. Address proof of the nominee
4. Photo identity proof
5. Cancelled cheque
6. Copy of bank passbook
7. Copy of medico-legal cause of death
8. Medical records (Admission notes, Discharge / Death summary, Test reports, etc.)
9. Copy of FIR
10. Panchanama
11. Inquest report
12. Driving license
13. Postmortem report

But how will your nominee submit the claim documents if both insurers demand originals?  Here’s how -

• Death Certificate: Your nominee will have to submit two original copies of the death certificate to both insurers. It can be availed from your local municipal corporation.

• In case of accidental death: Your nominee will have to submit the self-attested photocopies of the FIR to both insurers. Before approving the claim, the insurer will verify the FIR number with the local police station.

• Medical Records: Your nominee will need to notarise the medical records, i.e., get them authorised by a notary before submitting them to both insurers.

Some insurers may only ask for self-attested photocopies of original documents which they will verify themselves. So, you should check this with your insurer beforehand.

Note: The claim form and the list of documents may vary from insurer to insurer.
 

Step 3: Claim Approval and Payout
The final step is approval. Both insurers will assess the documents submitted by your nominee and decide whether or not to approve the claim. If approved, your nominee will receive the claim amount depending upon the payout options chosen by you during the policy purchase.
 

Conclusion
If you have two term insurance policies from two different insurance companies, your nominee can claim the sum assured from both if you pass away when both plans are active.  However, they need to make sure that they follow all the steps and submit all the relevant documents to both insurers to experience smooth claim settlement processes.