Can you have multiple life insurance policies?
Many people who take out life insurance do so because they see it as essential financial protection for their family or loved ones in the event of a worst case scenario.
But did you know that you can take out more than one policy?
So why would you take out multiple policies and how exactly does this work?
This guide will walk you through what you need to know and explain how our experts at Compare Club can take care of everything for you today.
There's no limit to the number of life insurance policies you can take out at any one time.
Bundling multiple life insurance policies can ensure you're covered for all potential outcomes.
Taking out multiple policies with the same provider could earn you a discounted rate.
Can I have multiple life insurance policies?
Yes. There are no restrictions in Australia saying that you can only have a single life insurance policy.
Different types of policies protect different risks to you and your family.
Life cover would pay your loved ones a lump sum if you pass away, for example, while Income Protection pays a percentage of your salary if you're temporarily unable to work.
What are the benefits of having multiple life insurance policies?
People often take out more than one policy to cover any gaps in their life insurance that would make them or their family financially vulnerable
Multiple policies working together can ensure you and your loved ones are completely financially protected should you pass away, get diagnosed with a terminal illness, or are no longer be able to earn an income due to illness or injury, even temporarily.
It also provides peace of mind that you're completely covered for what you need.
It's one advantage over one-size-fits-all policies that you often find in your superannuation.
This type of life cover isn't as comprehensive and doesn't offer products such as trauma cover.
There may also be more restrictions on how you can claim.
Taking out multiple policies means you can get more than the 'bare minimum' life insurance cover that's more tailored to your needs.
For example, if you were working in construction or mining and were worried about what would happen to you in the event of an accident, bundling life insurance policies could be a solution.
You could purchase a Total and Permanent Disability policy to cover you for serious injuries that would leave you unable to work, Income Protection to cover you for an injury that kept you out of action for a few months, and Life Cover to protect your loved ones if the worst happened.
We'll go into a bit more detail on these policies below.
To sum up, here's some of the benefits of having more than one life insurance policy:
Flexibility of choosing policies with different amounts of cover and term lengths.
You can take out tailored policies to match your current (and future) needs.
There's the potential to enjoy better rates when you take out a new policy rather than just expanding your current policy.
Bundling your life insurance policies often means bigger discounts when purchased through the same provider.
What types of life insurance policies can I bundle together?
Bundling your life insurance policies is an efficient way to get complete coverage for your particular needs.
There are four main types of life insurance, and you can bundle them together in a variety of different structures, depending on your needs. These include:
Term life insurance (aka life cover or death cover). This pays your beneficiaries a lump sum should you pass away or be diagnosed with a terminal illness.
Total and permanent disability (TPD) cover. which pays a lump sum if you can't work again because of permanent illness, injury or disability.
Income protection insurance. This pays up to 70% of your usual income if you can't work temporarily due to illness or injury.
Trauma cover. This pays a lump sum for certain injuries and illnesses, such as cancer and heart attacks.
Taking out all four policies will offer the most comprehensive life cover, although won't be suitable for everyone. Again, it's best to work out what you need before going all in with multiple policies.COMPARE & SAVE
How many life insurance policies can I have?
Realistically you can take out as many life insurance policies as you want - there's no set limit.
However, it's important to only get as much insurance as you need for your circumstances, as you don't want to be over-insured and end up paying too much in premiums.
Should I consolidate my existing life policies into one policy?
Just because you have multiple life insurance policies doesn't mean you shouldn't consolidate them when you need to.
Reducing the number of policies you manage at any one time can make your life easier, especially by consolidating them with just one or two different providers, rather than many different insurers.
The bottom line is that if you're finding it too difficult to manage multiple policies through different providers, or if you feel like you're paying more than you should be in premiums, then consolidating or removing unnecessary policies may be a good idea.
You may even get a cheaper rate by bundling multiple policies with the same insurer.
If you're not sure where to start or how to get the best deal on multiple policies, then speak to our specialists at Compare Club.
They compare 10 of Australia's leading life insurers to help you find the most affordable policy for your needs.Compare & Save
Can I claim on more than one life insurance policy at once?
Yes. In most cases, so long as the policies are active and their terms and conditions are met, they should pay out if you - or whoever is the insured party - passes away or makes a claim.
It's always a good idea to read the product disclosure statement (PDS) to make sure you understand what you're covered for and how the claims and payouts are structured if you have multiple policies bundled with one insurer.
If you're evaluating policies through Compare Club, our specialists can talk you through how this will work.
Can I name different beneficiaries on multiple life insurance policies?
Yes. Families can be large and complex, so you can spread your beneficiaries (the people who receive a payout) across several of your loved ones.
You aren't restricted about who you can name as a beneficiary on any particular life insurance policy, although many insurers only allow you to name up to five beneficiaries per policy.
How can I get started and take out multiple life insurance policies?
Ready to get the right level of life insurance to protect your loved ones financially but not sure where to start? Our team at Compare Club can help.
Our Sydney-based experts can help you through the process to find you cover that matches your budget.
Best of all, we compare life insurance options across a panel of 10 of Australia's insurers to find the cover that best matches your needs, regardless of whether you're taking out one or more policies.
If you're thinking about taking out additional life insurance, bundling multiple policies together or consolidating what you currently have, Compare Club can help you find exactly what you need.Compare & Save
The information contained in this guide is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. As such, it is important that you consider the appropriateness of any advice and the relevant product disclosure statement (PDS) before proceeding. Check with a financial professional before making any decisions.