As we know, life insurance is a contract signed between two parties: the insurance company and the insurance buyers. On the one hand, life insurance protects you and your family from random risks. On the other hand, it helps you stop worrying about the future and have peace of mind. Two common types of life insurance are term life insurance and whole life insurance. However, it’s not what life insurance is all about.
Have you ever known about multiple life insurance plans?
In this article, we will provide you with the big picture of multiple life insurance and help you answer the question: “Is it possible to have multiple life insurance plans at once?”
Multiple life insurance – Some important points to note.
To start with, let’s take a look at the main points of multiple life insurance. Multiple life insurance is a very special type. It can be viewed as an extension of single life insurance. This means you can get more than two types of life insurance if you want. Research of multiple life insurance found that spouses often prefer buying multiple life insurance to cover the life of their surviving wife/husband if one of them, unfortunately, passes away.
Another example is a family buys a permanent life insurance package for their newborn daughter. And when she is 30 years old, she buys another type of life insurance as a result of building her own family.
Those are some basic examples of having multiple life insurance plans. As we see above, buying multiple life insurance is essential. In addition, buying multiple insurance policies requires you to have a stable source of finance to pay the premiums.
“If there is anyone dependent on your income – parents, children, relatives – you need life insurance” – said Suze Orman – an America’s Personal Finance Expert.
According to economic research “Insurance-growth nexus: a comparative analysis with multiple insurance proxies”, the authors revealed:
“The study applies pooled mean group methods to examine long-term and short-term insurance-growth nexus over the period of 1980 to 2015. The findings of the study show that there exists a positive and significant relationship between life insurance and economic growth in the long-term and short-term for all selected countries[…]”.
This economic research shows the benefits of life insurance in the development of the economy.
The legal aspect of having multiple life insurance plans at once.
Having multiple life insurance plans at once is legal – especially in Canada. Depending on your financial conditions and your needs, company insurances don’t set limits on how many life insurance policies you want to purchase.
What is more, purchasing multiple life insurance brings you many benefits. One of the greatest benefits is the extent of your life insurance coverage. Of course, when you buy more than one life insurance package, especially different term life insurances, you have better protection.
Note: Due to the inclusion of different types of life insurance Canada, the cost of multiple life insurance is very expensive. Hence, it is not good for you to buy more than two insurance types when you come from the working class. Although multiple life insurance plans bring you great benefits, purchasing redundant insurance policies may lead to more serious financial burdens.
When do you need multiple life insurance plans?
- You want to spread your coverage: Spreading your coverage is what multiple life insurance is all about. In this regard, we do not add more details in this section because the benefits have been mentioned above.
- Protecting your business: Finding more than two types of life insurance is a good idea in the case of running your business. A man buys two types of insurance, one of them is permanent life insurance, and another is to protect his business’ finances. Multiple life insurance guarantees your debt payments, especially bank debts. Bad debts can make it difficult to run your current business if you don’t have any security measures.
- Minimizing the risk of insurance rejection: Although it is quite rare for insurance companies to refuse the validity of an insurance contract, the probability of being rejected is not unprecedented. What will happen if your beneficiaries can not derive advantages from a life insurance policy? It is unfortunate and nobody wants to face that problem. So, buying multiple life insurance is a wise choice in this case.
In detail, when an insurance company does not accept your insurance application for some reason, it leads to a loss of insurance benefits. However, if you get multiple life insurance policies, the second life insurance still has validity to protect you and your family.
- Purchasing “the ladder strategy”: There is a special concept called “the ladder strategy” – buying term life insurance plans with different periods of insurance: 10 years, 20 years, or even 30 years. The ladder strategy helps you save your money because it allows you to pay lower premiums for your whole life than paying the cost of permanent life insurance. Hence, the ladder strategy is a smart option, but you need some assistance from a financial advisor or an insurance expert before reaching the right decision.
And if you don’t know what to do, one suggestion to help solve the problem is Best Insurance Online, we can help you with our well-researched and helpful articles.
Can you get multiple life insurance contracts with different providers?
Similar to having multiple life insurance plans, there is no limit on signing insurance contracts with multiple insurance providers. However, signing insurance contracts with many insurance providers is often discussed yet rarely understood.
If you don’t understand which cases you are allowed to buy insurance from different insurance providers, your requirements will not be accepted.
For instance, you want to buy a life insurance package, but instead of applying to only one insurance company, you require two insurance providers simultaneously to compare which has a more suitable premium. Consequently, your requirement is denied immediately because the providers think you are trying to get the double face amount.
The bottom line
Viewed from different sides, multiple life insurance is an effective investment. A point worth considering is finding reputable insurance providers, knowing clearly which policies are suitable for you to avoid making unnecessary troubles. Good luck!