The need for a large amount of life insurance can include many different components. Large death benefit life insurance insurance should include the amount of death benefit that is needed and the type of coverage required.
Yet, in many instances, the large death benefit life insurance coverage may not all need to be contained in just one single policy – nor should it even all be obtained from the same life insurance carrier.
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That being the case, it may be true that splitting the large death benefit life insurance coverage across multiple carriers may provide an additional amount of benefit to the insured. Why? There are several good reasons for this. First, there are numerous types of life insurance policies – and each has its own distinguishing features and benefits.
Oftentimes, more than just one specific type of life insurance policy will work for an individual’s situation. For instance, short term coverage may be appropriate for debts that will be paid off within a certain number of years, whereas long term or lifetime coverage should be carried for purposes of estate planning and other longer term needs.
By allocating out the different types of coverage, an insured can forgo the need to go through the underwriting process over and over again – especially as their health may not be the best in the future.
In addition, by purchasing all of the needed coverage sooner rather than later, it is likely that an insured can “lock in” a higher amount of coverage and a lower premium rate due to their younger age at the time of application.
With all of this in mind, there are certain insurers that may offer a lower premium, a better return, lower fees, or other advantages over its competitors on a particular policy. Shopping for insurance can in many ways be like shopping for any other type of product or service – and it should therefore be compared – even in the higher death benefit categories.
Other Factors to Consider
Yet another benefit to owning life insurance policies from more than one carrier is the simple fact that there is no guarantee that all of the insurers that are in business today will be in business tomorrow. Given any number of business, financial, and economic factors, the solvency of an insurer can – and often does – change.
Therefore, by purchasing policies from more than just one insurance company, a policy holder can spread his or her risk across multiple entities, with the intent being that if one of the carriers does go under, there will be others still in force at the time that they are needed.
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