Life is unpredictable. You could be well and sound in one minute, but find yourself in a storm of crises in the next. Life insurance policies offer you and your family a helping hand during the times of need and the much-needed peace of mind.
But the one question we often get asked here is, can you have more than one life insurance policy?
The simple answer is yes. You can subscribe to multiple types of life insurance policies, all running concurrently. Put otherwise, you can cover various aspects of life risks at the same time to ease your burden when the unthinkable happens.
Here’s all the information you need if this is something you’re considering.
Why take multiple life insurance policies?
- 1 Why take multiple life insurance policies?
- 2 Must you take multiple insurance policies concurrently?
- 3 How do multiple life insurance policies work?
- 4 Types of life insurance policies that you can buy together
- 5 Conclusion
For starters, insurance firms offer various forms of protection policies that you can use to cover various financial responsibilities, including mortgage payment, hospital bills, and living costs. For example, you can take both income protection and mortgage life insurance policies to guarantee your dependents a place to live and provision, if you’re unable to work.
Further, by taking multiple life insurance policies, you’re assuring your loved ones that their welfare is taken care of no matter what happens in the future.
How much cover is suitable for you largely depends on your circumstances, which can vary from one moment to the other.
Must you take multiple insurance policies concurrently?
It is not compulsory to pay for multiple life policies simultaneously. Remember, the need to take out any policy majorly depend on your current situation. For example, if you don’t have a family or anyone depending on you yet, a single life insurance policy will likely be sufficient for you. However, as your situation changes in the future, for example in the event you get married or get children, the need for other covers arises.
A significant benefit of acquiring multiple insurance policies is that some firms may offer discounts on your premiums if you take multiple covers from them.
Before buying any cover, it helps to assess the number and type of risks that exist in your life and your beneficiaries. Once you’ve done this, it becomes easier to figure out whether you need one or several life covers.
How do multiple life insurance policies work?
Should you decide to take several life insurance policies, the next big question will likely be whether it’s possible to claim each. Here’s how it all works.
For starters, you must ensure that you’re providing accurate facts about your condition on all of your insurance coverage applications. Always act in good faith by revealing the exact information your insurer needs to approve the payment of your claim. Any falsified info can disqualify the claim request or lead to a partial cover of your burden.
Regardless of how many life insurance policies you take out, each exists independently in its own right, offering the benefit that it should when a risk occurs. For this, you have to pay the monthly premiums separately for each policy. Also, for term-based covers, each policy will expire at its own rate as guided by the contractual rules/terms.
Furthermore, if the design of the life insurance policy is such that its payout reduces over time, the reduction rate will be unaffected when you add other policies.
When you pass away, your dependents can claim simultaneously the sum assured for all the valid policies. However, they may need to file the claims independently in case of multiple insurance providers.
Types of life insurance policies that you can buy together
Below are the commonly combined life insurance policies to help you cover various aspects of your life:
Whole of life insurance
This policy is suitable when you want your family to be guaranteed a payout regardless of the time the risk happens.
Decreasing term life insurance
This policy is helpful when you want the insurance provider to cover a repayment mortgage on your behalf should you pass away. The payout reduces over time as the mortgage balance also decreases.
Over 50s plans
This policy is apt for people between the ages of 50 and 80 who have an underlying medical condition. It helps to cover the cost of funeral or succession charges when there’s an inheritance to leave behind.
Level term life insurance
This cover is mostly taken by parents looking to guarantee financial assistance to their children when they pass away suddenly.
Family income benefit
This policy acts as a replacement to your monthly income when you pass away so that your dependents get a guarantee of livelihood afterwards.
So, there you have it; if you’re still not sure whether one or multiple life covers are what suits your situation, now you have the answers. Please let us know what else we can clarify and we will be happy to assist!