Being adequately covered is one of the reasons why some people will opt to have more than one life policy in place. However, there can be a thing such as having too much cover which can result in you being over insured. Here is what to keep in mind when taking out multiple policies.
Financial impact of multiple policies
There are various reasons why someone will choose to have multiple life policies. A life insurance calculator could be the starting point for many policyholders to find out how much cover they will need. However, it can also result in someone wanting more than one policy to make sure that they have more than enough cover. While it is possible to take out more than one policy, checking if it will be financially sustainable is crucial. Keep in mind that you will need to track all policies and the cost of increased premiums each year.
Not understanding the claim process
The turnaround period for insurers to process claims and make sure the beneficiaries receive the payout will differ, and not knowing when each policy will pay out can lead to frustration. Therefore, telling a trusted loved one about your policies or having them stored in a safe place with all the details to each policy can make it easier for loved ones to claim from each insurer.
Not keeping track can cost you
Having multiple policies can increase the amount of cover a person can be covered for. But if not kept up to date, it could easily become part of the billions of unclaimed benefits. There are instances where family members may not know about life policies and the various benefits attached to them- especially when there is more than one policy in place. It could result in payouts from your policy not being claimed.
Complicated policy management
While insurers do their best to make your policy as hassle-free as possible, you still have to go through the process of taking the policy out and then keeping track of the paperwork; claims procedures, changes in premiums, exclusions and so on. Managing one policy with help from your insurer than trying to juggling multiple policies is beneficial.
Becoming over insured
You can have more than one life cover in place but avoid over insuring yourself in the process. To be over insured means purchasing coverage that exceeds the value of the thing or person you are insuring. It can also lead to placing a financial strain on your finances if you have not calculated if you can afford the premiums as they increase each year for each policy. Furthermore, the admin that comes with managing and keeping each policy up to date can be overwhelming.
