You may already have an insurance. But have you considered purchasing a second insurance policy?You are not alone. There are many people who consider purchasing multiple insurance policies, but are confused about it. You, too, may have several questions about having more than one insurance policy. Here are the answers to top four most asked questions about it on the internet.
Can you have multiple life insurance policies at the same time?
Yes, you can have more than one life insurance policy at a time. Keep in mind the guidelines and carry out a detailed analysis before opting for another life insurance policy.
Is it legal to claim death benefits from two life insurance policies or more?
Yes, it is legal to claim death benefits from two or more life insurance policies. Your nominee will be able to claim the death benefits from the various existing life insurance policies that you have bought in your lifetime. However, it will be subject to certain conditions. Consult the insurance company and get your doubts regarding this clarified before you opt for another insurance plan.
Under what conditions can you have multiple life insurance policies?
There are a few conditions that you need to fulfil to have multiple life insurance policies. Here are two of the most significant ones:
1.Share the necessary facts with the insurance company - It is essential to share details of your existing life insurancecover before taking another life insurance policy. Disclosing the facts will help the insurance company to offer you the best planto increase your insurance cover.
If you fail to disclose this information, your insurance provider may reject your nominee’s claims on grounds of non-disclosure or misrepresentation of facts.
2. Your Human Life Value should not exceed your policy cover - Human Life Value (HLV) tries to predict your earnings over the course of your lifetime. So, when you buy a life insurance policy, the insurance company calculates your HLV and they won’t be able to offer you a policy with a sum assured of more than your HLV. This means that, if the policy cover of your first policy is close to your HLV, the new insurance provider may not be able to provide you with another life insurance policy.
Again, in case you fail to declare the existing insurance cover when opting for a new policy, your nominees might be denied the death benefit in case of your demise.
What are the benefits of having multiple life insurance policies?
Here are some of the benefits of having multiple life insurance policies:
Protection against claim rejection:More than one life insurance policy will act as a cushion, if your insurance company rejects your nominee’s claim. So, it is better not to depend solely on one life insurance policy..
Increase your policy cover: In the course of time, as your financial needs increase, you may want to increase your life insurance cover. In this case, a second life insurance will help you cover your growing needs.
Freedom to choose different maturity periods:You can synchronise maturity periods of your insurance policies with your different life events such as marriage, birth of children, and their education, among others. These events may change your insurance requirements. With multiple life insurance policies, you can easily get a new policy that fits best with your current financial goals.