Category: Health and Life Insurance

Are you sufficiently insured through multiple insurance policies?

Ankita was not sure whether to buy another insurance plan as she was already covered by her company, but the sum was not enough. Would they allow us to claim from two different insurers was her another doubt? If you also have similar doubts and apprehensions, read our post to get an insight whether getting insured from multiple insurers serves the purpose or not?

What It Means to Get Multiple Insurance Policies?

Primarily the objective to buy more than one insurance policies is to sufficiently cover oneself. Example,  if you have a health insurance with a cover of five lakhs, that may not be sufficient with rising expense of medical treatment. Hence, you opt for another one with a cover of ten lakhs.

Should I opt for Multiple Insurance Policies?

The short answer is YES, and the long answer is – first you need to evaluate how much you may need

  • In case of your death and you are the sole earner of the family
  • In case You are disabled, and you are the sole earner of the family
  • In case, your family member is caught up with major illness

To evaluate each of the conditions we have taken up examples to explain –

In case of your death and you are the sole earners of the family

While purchasing a life insurance, get answer to – how much money your family would need at the time of your death to

  • Meet Immediate obligations
  • To sustain the household in future.
  • Calculate your human life value to your family

Calculate Your Needs

Atul age 34 is the sole earner of the family. He has a kid of two years old and right now his wife is not working. Let’s see how much insurance cover he needs.

Family Expenses  
Final Expense 30000 [Includes funeral cost, medical cost, etc.]
Outstanding Debts [ other than your mortgage] 150000
Outstanding Mortgage 1500000
How Many Children require College Funding 1
Child Age 2 years
Type Of Schooling [Public/Private] Private
Total Income Your Family Would Need If You Died Today  
Total Income Needed by your family, excluding taxes to sustain 1000000
How Many years Income Should Be Provided 18 [Considering your child starts earning at 20 years of age]
What is your current savings and investments (not including retirement funds)? 300000
What are your current retirement savings? 1000000
What is the value of the life insurance in force on your life? 0
In case your Spouse Works  
What is your spouse’s annual income? 1000000
How many years does your spouse expect to work? 20
Your Spouse Tax Bracket 20 %
Estimated Inflation Rate 9 %
After Tax Net Investment Yield 6 %
The Total Sum Needed by Your family would be 5,362,185.97


Do you have a full life insurance cover of 5,362,185.97 with the one or multiple policies you brought? If yes, your family is secured if not, reevaluate your insurance policies to get the minimum cover for your family.

In case you are disabled and you are the sole earner of the family

In case, you met an accident, due to which you are unable to work and earn you need to be prepared and make sure to have enough liquidity that could meet your necessary expenses.

Calculate Your Needs

 Here is an example –

Ankit 32 is looking for insurance in case he meets with an accident and is physically disabled to resume work. Let’s see how much amount he would need –

Monthly Income Available  
Income from current group disability coverage 0
Income from current individual disability coverage 0
Income from spouse or other family members 20000
Monthly investment income 20000
Monthly Expenses  
Mortgage (including property tax) or rent 30000
Car payments and insurance 6000
Utilities 5000
Food and clothing 20000
Child cares expenses 10000
Bank loan and credit card payments 30000
Medical expenses 20000
Health insurance premiums 10000
Insurance premiums (life, disability, dental, etc.) 10000
Savings, investment and retirement contributions 20000
Home maintenance costs 10000
Other (education, entertainment, etc.) 10000
Total Monthly Income Available 40,000
Total Monthly Expenses 181,000
Need for Additional Monthly Income due to Disability 141,000


So do you think your Disability/Life Insurance will provide you a sum of 181,000 to meet your monthly expenses?

In case, your family member is caught up with major illness

In case you or your family member is caught up with a major illness, you need to look for immediate cash. Health insurance could help you with these.

Calculate Your Needs

Kapil age 35, and his wife age 34 have a single kid, and two dependants live in Hyderabad. Let’s take a look at how much health cover he needs –



Total Insurance needed: 18.9 lakh

Insurance cover needed to protect your family fully 18.9 lakh.

Hence,  we have just seen different scenarios where an individual would need a high sum and hence multiple insurance policies could serve the purpose.

With multiple policies handling a person may have to devote time to managing the payments and renewals may consume time but on the other hand they offer key benefits like –

  • To diversify across insurers
  • To have plans with different maturities to adjust cover according to changing liabilities
  • To break down a large cover into smaller ones


We hope we have answered your queries on whether buying multiple insurance policies serve the purpose or not. If you still have any unanswered questions or need help, feel free to contact us here.

We would be glad to help you with your planning and investment related decisions.

Samiksha Seth

Content Strategist – Dilzer Consultants Pvt Ltd.



Calculate Your Needs


Calculate Your Needs

13 May 2016