Over time, your responsibilities and ambitions change. Your financial obligations will change when you plan to start a family or when your earning parents reach retirement age. The concept of multiple life insurance arose because of a shift in future goals. Is it, however, a good idea to purchase multiple policies?

If so, what factors should you consider when evaluating various life insurance plans? In this article, we will find out.

Is It Worth Having More Than One Life Insurance?

As time pass, your need evolves. The policy you bought years ago might be inadequate to cover your various needs. This is where you will realise the importance of having multiple or at least two life insurance policies.

Things to Consider While Buying Multiple Life Insurance Policies

Here are the things that you need to consider:

• You can invest in different objectives
  
  One of the primary reasons for purchasing multiple life insurance policies is to meet various life goals. You may be saving for your child's college education, their wedding, or accumulating wealth for your retirement. You can find different life insurance online that are tailored to your specific financial needs.
  
  For example, insurance companies offer child plans to assist you in paying your child's college fees and lavishly planning their wedding in the future. Pension and annuity plans are offered by insurers to assist you in planning your retirement goals. In case you want to buy a house, investing in a wealth plan is a good idea. Similarly, term plans are designed in order to meet your family’s financial needs if you die during the policy period.
  
  If the above is your sole reason for purchasing multiple life insurance policies, make sure that you carefully select the sum assured and policy term.
  
  
• Corpus for family
  
  The impact of inflation on your wallet may force you to reconsider your various investment strategies. Assume you purchased a life insurance policy ten years ago with a maturity value of around ₹50 Lakh. However, given today's expenses and prices for various necessities, do you believe this ₹50 Lakh would be sufficient to meet your family’s financial requirements when you were not present? Most likely not. In such a situation, the best alternative is to purchase additional insurance.
  
  The supplementary policy must be purchased after taking into consideration inflation and other financial obligations, such as unmarried siblings and children. You must also consider your dependent parents and your family's medical condition.
  
  
• You run a small business
  
  Many people believe that business has an advantage over salaried employment. Their assumptions are correct in some cases, but not always. Small business owners do not have access to benefits such as pensions, group life insurance, or medical insurance. If an emergency arises, you will be on your own to deal with it. In such cases, it is critical to have two life insurance policies.
  
  
• Multiple debts
  
  Purchasing more than one life insurance is appropriate if you are burdened with multiple debts. Let us illustrate this point with an example. Assume you have a 15-year home loan for ₹50 Lakh. You also have a business loan of ₹25 Lakh with a repayment period of 5 years. In this case, it is you can go for the three insurance plans listed below.
  
  
• Life insurance plan with a sum assured of ₹50 Lakh and a tenure of 15 years.
• Life insurance plan with a sum assured of ₹25 Lakh and a tenure of 5 years.
• Term insurance based on your family’s needs. 
  
  Now that you have these policies, even if a tragic event occurs that results in your death, the first two policies will cover your death. The third will assist your family in navigating a financial crisis.
  

• Cost of managing various policies
  
  Different life insurance policies have different premium values. As a result, when deciding on multiple policies, always keep the cost in mind. If you believe that paying for various policies is putting a strain on your budget, you should reconsider your idea and investigate other options.
  
  

What are Some of the Alternatives to Multiple Life Policies? 

Insurance companies now offer a variety of options through which you can avoid purchasing more than one life insurance policy. These are.

• Life insurance riders^#
  
  Riders^# are optional add-ons that can be purchased to extend the scope of your policy coverage. You can obtain them by paying a small additional fee.
  
  
• Raise your death benefit
  
  If you are concerned about your family's future and want to provide them with more funds after your death, simply increase your policy's death benefit at major events of your life like marriage and having children. Your existing policy's premium will rise slightly as a result. However, it is recommended that you first check with your insurer to see if they offer this option. 
  
  

Conclusion

The decision to purchase multiple life insurance policies should be based on your financial needs, future objectives, and family size. If you are shouldered with multiple debts, have dependent parents with serious ailments, or are sensing some adverse condition in a business, you may choose more than one life insurance policy. If you are not sure which plan to choose, look into Tata AIA life insurance plans to make an informed decision

L&C/Advt/2022/Aug/1900.