Let’s face it, the future is unknown and unpredictable. You might be doing fine today but then tomorrow brings life’s sorrowful curves. Luckily, life insurance is your friend in need; it helps you face the worst of days in the aspects that would otherwise rob you of the desired peace of mind.
Even then, the common question that most people ask is, can one acquire several life insurance policies?
The quick answer to this is yes, you can! You’re allowed to purchase multiple forms of life insurance policies all at once or separately. This enables you to cover various facets of life’s risks while easing your burdens in case of crises.
Why take out several life insurance covers?
For starters, life insurance takes numerous shapes all meant to offer protection against various risks that affect you. Whether you need assurance that your home will be paid for in case you pass away before finishing paying for your mortgage or want your family to receive regular financial help after you’re gone, life insurance can help.
For example, it’s not uncommon for individuals to take out both mortgage and income protection policies concurrently. Your most suitable combination depends on your individual needs and the risks you want covered.
Must you take multiple insurance policies simultaneously?
Of course, not. You have the liberty to decide the number of insurance policies that cover your life’s risks at any given point in time.
For instance, if you’re yet to get married, a single life insurance policy would offer sufficient cover now. Later on when your status quo changes, an additional policy like income protection may prove necessary.
While it’s not compulsory to purchase several insurance policies concurrently, there’s a significant benefit in doing it. Some providers offer good discounts on premiums to applicants who bundle together multiple policies.
The bottom line here is to carefully assess your life’s risks and how they impact your beneficiaries. With that, you’re able to decide appropriate covers for your situation.
How do multiple life insurance policies work?
Once you’ve decided that you need multiple life insurance policies, your next big question is probably on how they work. Here’s a brief explanation:
First, and as is the case with all other insurance applications, you need to be honest when revealing the nature and other specifics of your status quo. Providing accurate facts allows your insurer to correctly assess your life’s risks and ultimately offer you a suitable cover.
Secondly, irrespective of the number of life insurance policies you take, it’s worth noting that each operates independently. This way, you pay the monthly premiums for each policy separately. Also, in the case of term-based policies, each expires at its rate as directed by the contractual terms.
Thirdly, life insurance policies tend to reduce payout amounts as they age. Adding other policies to run concurrently to it doesn’t affect its reduction rate.
Finally, should you pass away during the term, your beneficiaries can claim simultaneously the sum assured by the valid policies. However, if your policies are with multiple insurers, they have to file claims separately for each policy.
Types of life insurance policies purchasable simultaneously
Not sure which life insurance types to combine? The following are a few you may consider when looking to cover multiple risks:
Over 50s plans
This policy provides an excellent cover for people who are between the ages of 50 and 80 with an underlying medical problem. It covers the financial costs associated with funerals and successions of inheritance.
Family income benefit
Also known as family income protection, this policy provides the financial assistance that your family gets from your monthly income when you depart. It guarantees financial security to your dependents for the protection of their welfare after your passing away.
Level term life insurance
This cover offers a lump sum payout to children whose parents suddenly pass away.
Decreasing term life insurance
With this policy, you get the cover for the repayment of any balance on your mortgage when you pass away. Its sum assured reduces as the mortgage balance decreases over time.
The whole of life insurance
This policy offers cover to your beneficiaries irrespective of the occurrence time of risk.
As we conclude this, we believe you’re now better equipped on what you need to know about taking out multiple life insurance covers. If you have any question or concern about anything, feel free to ask in the comments below we’ll be happy to help.