Do Multiple Life Insurance Policies Make Sense
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Does taking multiple life insurance policies make sense?
A life insurance policy is one of the most important things that you should buy in today’s world. Life is uncertain, and we do not know what is going to happen to us in the next moment. Therefore, putting money in a life insurance policy is always a prudent idea. If anything unfortunate happens to you and you pass away within the tenure of the policy, your family will get some amount of money to support themselves. And if you complete the tenure of the policy with good health, you will get the maturity benefit. Buying life insurance is a win-win thing for securing your financial well-being in the long run.
What is a Life Insurance Policy?
Life insurance can be called a contract between an insurance company and a policyholder. The contract is called a policy and it guarantees that the insurance provider will pay a sum of money to the nominees in case the policyholder passes away within the policy term. This is done in exchange for the premiums that are paid by the insured during their lifetime. In order to make things transparent for the nominees and even the insurance company, the policyholder must disclose his/her past as well as current health conditions. Please note that the policy may have additional terms and regulations regarding the payout of the insurance policy which is detailed in the policy document.
Key Points to Remember about the Life Insurance Plan
- It is a legally binding contract that pays a death benefits to the beneficiaries of the policy when the policyholder dies.
- In order to keep a life insurance policy in force, the insured must pay a single premium at once, or pay regular premiums over time.
- There are various types of life insurance such as term life insurance and permanent life insurance.
Is It Wise Decision to Have Multiple Life Insurance Policies? – Know the Benefits of Owing More than One Term Life Insurance
As we talk about life insurance policies, some people choose to have multiple life insurance policies. Well, having more than one or two life insurance policies is fine until it hurts your finances. Looking at the brighter side, here are some reasons that justify that it is a good idea to have multiple life insurance policies.
1. Protection Against Claim Rejection
When you have multiple insurance policies, you have the advantage of asking for your claim, and it does not matter if it is rejected by one insurer, since the others may accept your claim. Also, as you have multiple life insurance policies, your beneficiaries will have the option to get the claim amount if you pass away. When you are buying several health insurance policies, you must ensure to check the claim settlement ratio of those insurance companies. Even if a company charges a little more than the others but has a higher claim settlement ratio, there is no harm in paying a bit extra to it.
2. Affordable
Instead of purchasing an insurance policy that offers a higher sum insured, you can buy several policies that make the coverage big. You can also choose to add coverage such as disability cover with some of the policies enabling you to customize your coverage better.
3. Multiple policies for various needs
Life insurance policies are based on specific needs. When you buy multiple life insurance policies, you can choose them on the basis of your needs. For example, if you want to invest and at the same time want an insurance plan, you can go for ULIP as you can expect returns. If you are a little worried about the safety of your family’s future, especially when you are not around anymore, you can get a term life insurance policy. If you are trying to build up a retirement corpus, you can choose a retirement plan. Therefore, when you have a combination of various life insurance plans, it will help you to fulfill various needs.
4. Financial goal-oriented mix of premium and coverage
While buying a life insurance policy, we see if the coverage is adequate and if it will compensate if the policyholder passes away. Well, coverage of the policy is not enough since you also need to focus on the premiums to be paid and the other financial needs. A term life insurance policy may provide good coverage at reasonable rates but it will certainly not support you to build your retirement corpus. Therefore, you also need to get a pension plan, child plan, and so to meet your investment goals.
All of these can help you decide on whether you should take multiple life insurance policies and what will be the best life insurance policy according to your needs. You should note that when you decide to purchase any new life insurance policy, you are required to declare your existing policies to the new insurance provider. These days you can browse a lot of insurance plans online and even use tools such as a human life value calculator to determine if you have sufficient financial coverage for your life. It is not only possible but advisable to have two active life insurance policies so that you can tweak each to get maximum coverage for your financial wellbeing
Author Bio
Paybima Team
Paybima is an Indian insurance aggregator on a mission to make insurance simple for people. Paybima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. Paybima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
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