One of the frequently asked questions about life insurance in Australia in 2022 is whether it is legal to have multiple life insurance policies. In Australia, it is allowed to hold multiple life insurance policies in 2022. As long as it makes sense and you completely disclose to all insurers your current coverage, you are free to obtain as many plans as you need and can afford. In this post Billy Explores is here to help! We will discuss more about multiple life insurance policies in Australia, as well as the easiest way to compare life insurance and see if you’re getting the best value life insurance for your needs.
Is It Legal To Have Multiple Life Insurance Policies in Australia in 2022
Even though life insurance providers often don’t care how many policies you have, they might pay closer attention to the overall value of your benefits, i.e., whether it is appropriate for someone with your predicted income and circumstances. An insurer might demand that you have a medical examination, depending on the level of coverage you choose. We tend to want more life insurance because it’s a great way to spare your loved ones some of the suffering of losing your support and income should the unexpected happen to you. Make sure the need for additional coverage is legitimate and that you can eventually afford it before you start doing a life insurance comparison through Billy Explores.
In Australia, is it allowed to have more than one life insurance policy?
Yes, it is generally acceptable to carry numerous life insurance policies in Australia. In fact, many people want to diversify their insurance coverage to minimise any potential insurance coverage gaps. You can combine your life insurance with other sorts of policies, such as TPD, trauma insurance, and income protection insurance, from the same insurer or from a different business.
As an example, suppose you bought a life insurance policy in your 20’s that will cover your final costs and any outstanding hospital debt. Now that you are in your 30’s, you have started a family, purchased a home, and need supplemental insurance to safeguard against underinsurance.
To pay off your mortgage and help your family maintain their standard of living should the unexpected happen to you and your income is taken away, you can buy a second life insurance policy.
However, be careful not to overinsure as this could result in your loved ones not receiving the whole settlement and your premium payments being wasted. Whether it is you or your dependents, life insurance is not intended to be a source of financial gain.
Typically, the insurer will enquire about any existing life insurance plans you may have when you apply for life insurance.
- The cost of these policies (coverage amount), and
- Whether you’ve ever had a life insurance claim declined, and if so, when
Can you choose the beneficiaries from your multiple life insurance polices?
In general, you can choose a different beneficiary for each policy. For each life insurance policy you own, insurers typically let you name up to five beneficiaries, but this varies by company.
Is it possible to have multiple income protection policies?
In general, it is possible to have two income protection policies. However, offset clauses are already present in income protection insurance. In other words, because you cannot be better off disabled, the total maximum benefit you can receive from all of your insurance is often capped at 75% of your salary. Otherwise, you could lack the drive to get better and go back to work.
The waiting and benefit periods for two income protection policies are complimentary. If, for instance, your superannuation fund offers income protection coverage with a 30-day waiting period and a 2-year benefit term, you can add more income protection coverage with a 1-year waiting period and a benefit period that lasts until age 65.
Can you file a claim for more than one life insurance policy?
If the claim is legitimate and you completely revealed all pertinent information when applying for life insurance, including the amount of policy you have, your beneficiaries won’t typically have to worry about the payout from several life insurance policies. A typical claim procedure entails obtaining the death certificate, completing claim forms for each company, and sending all of the forms together with any necessary supporting documentation.
Do you need multiple life insurance policies, and if so, why?
The greatest reason why Australians need more life insurance is typically a significant life change, such as getting married, starting a family, purchasing a home, or changing employment. Another explanation could be that your business provides group life insurance, but it is insufficient to provide for your family should the worst happen.
When beginning a business, you might also need additional protection to cover fixed business expenses; this is typically referred to as keyman insurance.
Many people buy levels of life insurance. When you’re single and beginning your job, you’ll often purchase a modest amount of insurance, adding more as your demands change and your capacity to pay for it rises.
Before doing a life insurance comparison through Billy Explores, and doing applications for numerous insurance plans, you might wish to think about:
- Budget. Can you afford to pay the premiums on time? Verify whether your policy offers level or stepped premiums. Payouts could take a while. Due to the extensive procedures needed, your beneficiaries might have to wait longer for a claim to pay. Each insurance company’s claim form needs to be filled out separately.
- Unclaimed compensation. If you have several policies, it’s possible that your loved ones won’t be aware of them all, which could lead to benefits going unrecognised Typically, group plans are not underwritten at the time of application. If you have a personal life insurance policy and one that is part of a group plan, make sure to examine the PDS and the group fund’s paperwork to see if owning multiple death benefit policies is permitted.
- Policy administration. It can be necessary to juggle multiple life insurance policies. Typically, you must evaluate each policy annually to make sure your personal information is current, your coverage is enough, and your beneficiary information is still pertinent
- Overinsurance danger. Verify that your requirement for greater cover is legitimate. If you have excessive insurance, you will typically lose the coverage that exceeds the amount of lost income you are replacing.
How to make numerous life insurance applications
If you feel that purchasing multiple life insurance plans is essential, the best idea is to do a life insurance comparison through Billy Explores. You can save time and effort and see if you can get better deals on your multiple life insurance policies from our panel of providers.
What Are The Alternatives To Multiple Life Insurance Policies in Australia?
The following other options exist in addition to purchasing additional life insurance policies from various insurers to guarantee you have adequate coverage:
- Select a term life insurance plan that is assured to renew so you can enhance your current coverage without supplying further information or going through a medical exam.
- Combining policies enables you to get various forms of insurance. You can be eligible for a bundle discount if you purchase multiple products from the same insurer, such as life insurance and TPD.
- The double TPD benefit of a combined life and TPD policy enables you to reinstate the life insurance coverage that was lowered as a result of a total and permanent disability claim right away.
- A combined trauma and life insurance policy offers coverage for double trauma. The part of life insurance that was cut due to a trauma claim settlement might be restored.
After a claim for a critical illness stated in the insurer’s PDS has been paid out, often 12 months later, trauma reinstatement gives you the chance to repurchase trauma insurance.
Compare multiple life insurance policies Australia
So we know now the answer to whether you can have multiple life insurance policies Australia. So the next step is to compare life cover through Billy Explores. You can even compare multiple life insurance policies! Save time and effort and explore potential savings for your multiple life insurance policies through Billy Explores.
Of course, while you’re looking to compare your multiple life insurance policies, why not do a health insurance comparison as well? A private health insurance comparison is just as important and just as easy through Billy Explores.
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