Should you have multiple life insurance policies?

Life insurance is financial protection against certain contingencies such as death, disability, accident, retirement, etc. There is a loss of income in the family when its breadwinner passes away or becomes disabled. Life insurance products provide a certain amount of money in case the life insured dies or becomes disabled due to an accident during the policy term. A person can buy more than one life insurance policy from different insurance companies.

Why should you buy?

If you have more than one life insurance, then you are less worried about the rejection of the insurance claim. Even if one company rejects the claim for any reason, then the claim amount is received from the other company.

An additional insurance policy can also be purchased keeping in mind the other loan taken including the home loan.

As the income of a person increases in life, so do the responsibilities. Keeping in mind the increasing responsibilities, one should buy more than one insurance policy.

Keep in mind

If you buy a new life insurance policy, it is necessary for you to inform the life insurance company about all your existing life insurance policies. You will also have to provide your income-related documents to the company, which will explain why you are buying additional policies.

If the value of the insurance exceeds the value of the person’s life, the insurance company may reject your offer to buy a new policy. For the value of the life of a person, 20 times his annual income is considered as the basis.

It is important for you to keep all your policies active. For this, you have to pay a premium regularly to the insurance company. You also need to keep the nomination updated. You will have to modify it if necessary. If you have more than one life insurance policy, then an e-insurance account will help you a lot. This will give you easy access to all your policy information.

If you have more than one policy, then the family members must know about the sum insured and nominee of each policy. This will make it easier to claim in case of any untoward incident.