Does Having Multiple Insurance Policies Make Sense?
Variety is the spice of life. Different variants add different flavor and meaning to every aspect of our life. So either we talk about our food where we use multiple spices or we talk about our wardrobe which contains a dress for every occasion, owning multiple variants is always beneficial. So when it comes to buying insurance, the same principle drives our investments and we buy different policies. Though it is beneficial, do we know what the benefits are? Or do we just consider holding multiple policies an avenue of investment and saving tax?
Having multiple insurance plans is a very wise move if the decision is backed by the right reasons. So let’s see what the underlying benefits are:
- A policy for every need - Life insurance has different types of policies and each has a separate need. As such having multiple plans become all the more relevant in the case of life insurance. If you are looking for income replacement, a term insurance policy is helpful while a child plan ensures the security of your child’s future. A pension plan helps you in building up a retirement corpus and a ULIP helps in wealth creation. So having a combination of different plans ensure a proper goal-oriented planning.
- Syncing coverage, premium and financial goals – A good coverage is very essential to compensate for the loss in case of premature death. At the same time affordability of the premiums and meeting financial goals also has to be considered. While a term plan is affordable and provides good coverage it does not provide for a retirement corpus or for your child’s future. Neither can it meet your investment goals and so a pension plan, child plan or a ULIP is required to supplement your insurance requirements.
- A comprehensive coverage – Let’s face it, though your health insurance plan might provide a comprehensive coverage option, it might fall short when it comes to providing specialized coverage features. A Critical illness Plan or a Hospital Daily Cash Plan provides such specialized coverage thus supplementing our coverage options.
- Maintaining an optimum coverage with affordable premiums – In today’s age of medical inflation having substantial health insurance coverage is essential. But affordability of such coverage is a dampener. Affording a high coverage is not possible with a normal health insurance plan and so having a top-up or a super top-up plan with a normal health insurance plan is a better option as it affords having a higher coverage at a lower premium.
- Easy settlement of claims of high values – When you face a high claim value, having multiple plans proves to be a blessing. You can get your claim settled from the other company if you exhaust the coverage of one.
- Higher chances of getting your claim settled – In case of an ambiguity in the claim settlement process of one company where your claim is rejected either completely or partially, you may approach another company for getting your claim settled. This increases your chances of claim settlement which would otherwise have been jeopardized.
The more the merrier is the baseline when it comes to insurance. Owning multiple plans is very beneficial so you should not shy away from investing in more than one insurance plan. If your pocket poses a constraint, build your portfolio slowly but surely and enjoy the benefits or a comprehensive coverage, lower premiums, fulfillment of financial goals and a complete insurance portfolio.