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.
30000 [Includes funeral cost, medical cost, etc.]
Outstanding Debts [ other than your mortgage]
How Many Children require College Funding
Type Of Schooling [Public/Private]
Total Income Your Family Would Need If You Died Today
Total Income Needed by your family, excluding taxes to sustain
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)?
What are your current retirement savings?
What is the value of the life insurance in force on your life?
In case your Spouse Works
What is your spouse’s annual income?
How many years does your spouse expect to work?
Your Spouse Tax Bracket
Estimated Inflation Rate
After Tax Net Investment Yield
The Total Sum Needed by Your family would be
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
Income from current individual disability coverage