Insurance awareness is increasing rapidly with more and more individuals investing in life insurance plans to cover their financial risks if you do financial planning properly, you will end up having multiple life insurance policies.
Your income keeps on changing and you should increase your cover amount accordingly. Insurance plans are given based on income multiplier. You cover adequate term insurance at every stage in life whether it is investment or retirement but having too many life insurance plans is also not advisable, it should be need-based. Every time taking a policy you need to mention details of the other policies which you have, failure to do this can lead to death claims being denied.
Pay Premium on Time
With the rise in knowledge and experience, your financial liability also rises. Opting for a single life insurance plan in your 30’s and covering even in your 50’s might not be a good option. Also, different life insurance plans have different purposes; all the policies need to be managed with the timely payment of premiums.
Reveal Past Policies
Life insurance policy act as a hedge investment and a risk mitigation tool, there could be other benefits such as collateral for loans., you can opt for multiple life insurance plans but disclose all information about your earlier life insurance plans at the time of opting for the subsequent ones, You can opt for an e-insurance account (EIA) to manage your policies.
Multiple Life Insurance Plan Benefits
Complete financial protection
It is advisable to opt for a high coverage at a younger age so that you can save the premium; full life insurance coverage depends on annual income, life stage, dependents, and liabilities as well as financial goals. Opting for multiple maturity dates for multiple plans, you can get good pay-outs at different intervals.
Different plans for different needs
For instance, term plans are needed for income replacement while child plans help in creating a secured future for your child. If looking for an investment purpose you can invest in ULIPs while pension plans help in retirement planning. A diversified portfolio of multiple policies takes care of all your financial needs and goals.
Increased tax benefits
The premiums paid are eligible for a deduction of up to Rs 1.5 lakhs. While buying multiple plans, if the aggregate premium is higher, it will allow you to claim the maximum deduction offered by section 80C.