While combining many insurance policies to an extensive cover may increase the cost somewhat over a single insurance policy, there are several benefits. First, when the insurance coverage is substantial, it is also better to diversify term insurance among many insurers. Because a claim for a smaller amount may sometimes be resolved quickly, while a claim for a more excellent coverage may occasionally take longer to resolve; moreover, the allowable sum guaranteed amount may change according to the various underwriting guidelines each firm follows. Finally, a person can choose from several insurance plans to achieve the desired amount, for example, if the underwriting disallows the sum guaranteed owing to health issues.
While it could be more expensive than having a single significant policy, spreading the cover among insurers might provide a buffer against claim rejection. Purchase just one term insurance policy with a sizable life cover, then move on. If this is what your financial adviser has been telling you, you should ask him whether his recommendations are sound. However, is one term plan sufficient? Pure life insurance is less expensive than policies that have both investment and insurance components. No, experts say. It would help if you had various insurance plans for multiple reasons.
Hedge Against Claim Rejection
According to conventional thinking, the insurance company won’t deny your claim provided you accurately disclose all health-related information and have the necessary checkups.
Even though there is little chance that a claim will be rejected, it does happen occasionally. Imagine what would happen if the claim money was not paid to your dependents after passing. When purchasing numerous policies, be sure to vary across firms based on how quickly claims are settled. Although some insurers may charge a bit more than others, paying more to a business with a superior track record of resolving claims makes sense.
When your claim is denied, you could feel hopeless. Because for many, paying for such a large portion of the hospital’s expenses out of their own pockets may be a nightmare. Multiple health insurance plans might be quite beneficial in this situation. If your claim is denied by one insurer, it can be approved by another, preventing you from losing your whole claim payment. Therefore, having coverage under several different health insurance policies acts as a safety net against claim denials.
You can purchase many policies with various maturities as opposed to just one 30-year insurance. This will enable you to adapt to your demands as they change throughout your life. This is due to the fact that you choose the insurance coverage based on your current liabilities, which are subject to alter over time.
For the reasons listed above, having many plans that provide extensive coverage is preferable to having a single policy with a high sum assured. But, of course, this price will end up being higher. Multiple health insurance policies with smaller deductibles might result in more coverage at a lower cost. Investing in many policies eventually results in a more comprehensive cover and a lower price than purchasing a single plan with a larger quantity of coverage. For this reason, choosing various health insurance policies is a smart move.
Diversify against insurers
To diversify their insurance portfolio and take advantage of the insurance companies’ coverage policies, people might buy several insurance plans from several insurers. According to the contribution provision, corporations resolve disputes. The insured person has the right to file a claim with any health company for the difference when the insured amount is less than the claim. Both insurers will pay for pre-existing conditions following their standard procedures.
Diversification among insurance providers is a significant advantage of buying many health insurance policies. There are two types of health insurance policies available for purchase. The other might be a health ULIP, whereas the first could be a pure comprehensive health insurance plan. The best approach to ensure your health is with a health ULIP since it offers fund value and insurance. Additionally, the policyholder may file a claim with any health insurance provider if the insured amount is less than the claim amount. Finally, both insurers are capable of handling pre-existing disease payments.
Personal health policy and critical illness plan
In addition to a standard personal insurance policy, critical sickness policies provide additional protective protection. But expensive diseases or serious illnesses are not covered by traditional health insurance policies. Therefore, purchasing both policies will maximize coverage while lowering risk. A critical illness plan offers protection against specific ailments that your primary health insurance may not cover. The best option is to get single basic health insurance and a vital sickness plan as a backup. Combining the two will increase coverage while lowering risk.
Beyond Term Plans
Should your insurance portfolio contain term plans exclusively? Should you stay away from Ulips or endowment policies? The response is based on several variables. In the early years of an endowment policy or a Ulip, there is a larger commission and a lower surrender value; therefore, cancelling them before maturity may result in significant losses. It is better to stick with an investment-based insurance program until the conclusion of the tenure, especially if it is an endowment plan.
Even in Ulips, leaving after five or ten years will result in a loss because surrender costs become null after the first five years. Therefore, it is better to keep the insurance in place if it has been producing high returns.
If you are just getting started, look for a few term policies with various maturities, accumulating the necessary life cover.
Keep the following in mind while considering whether to get several insurance policies:
- Examine each of the insurance plan’s documentation carefully to see if having both of them would result in cost savings. Knowing the cost-sharing provisions will help you choose which strategy should be your primary and which should be your secondary one.
- In case you have any questions, get in touch with the member service representatives of both plans to learn more about the claims settlement procedure.
- Consider the premium payment. Determine the monthly premium you would be expected to pay for both.
- Determine if you have enough money and are prepared to deal with the trouble of having many plans.