Can you have multiple life insurance policies?

Is there any profit from getting a number of life insurance policies? Just as most issues in life, something carried out in extra is just not good. So having method too many life insurance plans can be not advisable. It must be need-based

If you select a number of maturity dates for a number of plans, you may get staggered pay-outs at totally different intervals. This additionally creates a number of revenue streams that can be utilized to match the timelines of your monetary objectives

Insurance consciousness is now quickly rising throughout the nation with an increasing number of people investing in life insurance plans to cowl their monetary dangers. Many people are additionally shopping for a number of life insurance policies. But, is it proper? Should you may have a number of life insurance plans unsuitable with having a number of life insurance insurance policies. In reality, in case you are doing all your monetary planning correctly, you’ll find yourself having a number of life insurance policies.

“Your income keeps changing and you should be increasing your cover amount accordingly. Also, plans are given on the basis of an income multiplier. You should have adequate term insurance cover at every stage in life. You should plan for your retirement and you should look at investing – for all of these, there are insurance solutions which you can take,” Yohannan informed FE Online.

However, Yohannan cautioned, simply as most issues in life, something carried out in extra is just not good. “So having method too many life insurance plans can be not advisable. It must be need-based. If there’s a requirement, then go for it. Having 15-20 insurance policies can result in even monitoring points. Also, each time you are taking a coverage you’ll have to point out particulars of the opposite insurance policies which you may have. Failure to say all particulars can result in loss of life claims being denied.

Do you want a number of life insurance?

Always prompt having one time period insurance plan and one extra coverage to care for household wants as a result of enhance in revenue and way of life. However, “it is possible to buy two or more life insurance policies, but it is completely up to the policyholder to figure out the insurance needs and which plan he/she should buy. Insurance companies have certain underwriting guidelines, which depend on the insured’s annual income, age, and the potential to pay the premium. We suggest always keep yourself adequately covered up to your maximum eligible limit.”

As the revenue will increase with time, the insurance protection must be elevated to match the approach to life and wishes of the household. At instances, one coverage won’t be enough to care for all of the wants protecting in thoughts the household’s measurement and necessities. One must know {that a} policyholder will likely be eligible for a most general sum insured of 25-35 instances of his annual CTC at a youthful age and as much as 10 -15 instances of the annual CTC at a better age. It is all the time advisable to all the time preserve your self adequately lined as much as the utmost eligible restrict,”

With the rise in age, your monetary legal responsibility would additionally rise. So, choosing a single life insurance plan in your 30’s after which hoping to be adequately lined even in your 50’s won’t be such a viable possibility. Also, totally different life insurance plans have totally different functions and a number of plans can certainly be taken. But all insurance policies have to be managed with the well-timed fee of premiums to maintain them in the drive.”

Reveal Past Policies

Experts see life insurance primarily as hedge funding and a danger mitigation instrument. It is thus thought-about to be your Plan B. However, there could possibly be different advantages similar to collateral for loans as nicely.

“So, yes, you can always opt for multiple life insurance plans and you should, if you feel that you are under-insured. Just remember to disclose all information about your earlier life insurance plans at the time of opting for the subsequent ones, as underwriters would need to consider your overall life insurance coverage before issuing your plan. Also, you could opt for an e-insurance account (EIA) to manage your policies better,”

“You can also earmark each policy to a specific goal so that your financial planning is targeted. The life insurance protection that comes as an added benefit, would also provide financial security to your loved ones in your absence,”

Can you declare two life insurance insurance policies?

“Yes, an individual can file e claim in all the life insurance policies up to the eligible Sum assured he bought. Consumers need to be transparent with the insurance companies while claiming the Life Insurance policy. While claiming in the multiple insurance policies, your nominee should furnish all transparent and complete information about all the insurance plans bought by you. Every Insurance company has a defined set of claim settlement procedures which they will follow for settling the claim,”

Multiple Life Insurance Plan Benefits

There are totally different advantages of shopping for a number of life insurance plans. Such as:

Complete monetary safety

Multiple life insurance policies additionally guarantee that you’re optimally insured. If you may have a current plan the place the protection is just not ample, further coverage would assist in supplementing your current protection to give you full safety. Insurance is used as a “risk mitigation tool” and until you may have ample insurance protection, you’ll be able to all the time go for extra plans.

“However, it’s advisable to go for excessive protection at a youthful age, as a way to save on the premium, it won’t be possible for everybody. Or there could possibly be a scarcity of intent or consciousness. Thus, at a later stage in life, you’ll be able to step up the protection as your revenue and monetary legal responsibility grows to be adequately insured by choosing one other life insurance plan

The general life insurance protection depends upon annual revenue, life stage, dependents, and liabilities in addition to monetary objectives. However, the generic thumb rule states that you could have a minimum of 10-15 instances of your annual revenue.

If you select a number of maturity dates for a number of plans, you may get staggered pay-outs at totally different intervals. This additionally creates a number of revenue streams that can be utilized to match the timelines of your monetary objectives

Different plans for various wants

Different monetary wants require unique coverage. For occasion, time period plans are wanted for revenue alternative whereas baby plans assist in making a secured corpus in your baby.

“If you are looking for investment returns you can invest in ULIPs while pension plans help in retirement planning. Each type of life insurance policy can be used to fund a specific goal and so, with multiple policies, you can create a diversified portfolio that takes care of all your financial needs,”

Increased tax advantages

Life insurance plans get pleasure from tax advantages. The premiums paid are allowed as a deduction of as much as Rs 1.5 lakhs. When you purchase a number of plans, the combination premium is greater permitting you to say the utmost deduction supplied by Section 80C, thereby optimizing tax-saving advantages as nicely.

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