Many of the big insurance companies on the market offer multiple types of insurance. For example, you may be able to get your car, homeowners, and life insurance all through one company. However, there are many pros and cons to taking this approach. While it can be convenient, it’s not always the best option for everyone.
The biggest reason people choose to bundle their insurance is because of the discounts that insurance companies offer. If they already have you as a client for one type of insurance, it barely takes any time or effort to set you up with the other types of insurance you need. The company already knows the details of your finances and lifestyle that they need to decide how much of a risk you are. Because it’s so easy to write multiple policies at once, they’ll offer a discount.
These discounts are particularly effective if you’re healthy, safe, and responsible. You would probably get pretty good deals on all of the insurance that you need, so bundling them together could put your premiums at extreme lows for amazing savings. You also only have to worry about paying one premium each month, instead of two or three.
However, you won’t always get huge savings by bundling your insurance if you are a riskier customer in some ways than others. For example, if you’re a good driver but aren’t in the best health, then it might be cheaper to get your life and car insurance policies separately. Your life insurance policy will be higher if you are a health risk, and you don’t want this to affect your car insurance. Take the time to shop around and look for companies with the lowest rates for each policy. Sometimes this means looking at local and regional companies. Be sure to look at each policy thoroughly and think about the long-term cost, not just short-term discounts.
Another reason that many people like to bundle their life insurance with other types of insurance is that it is very convenient. You only have to pay one bill each month instead of several different bills with different companies. The sign-up process is also much easier because the paperwork and evaluation are much more streamlined. Many people don’t want to take the time to shop around for different insurance policies while juggling work, family responsibilities, hobbies, and more. If convenience is more important to you than cost, then it makes the most sense to bundle your life insurance with your car insurance and homeowners insurance.
One of the potential benefits of bundling your insurance plans is that the insurance company will be much more forgiving if you have to make a claim. If you only have one policy, they may opt to up your rates or even drop you as a client if you make a claim. However, if you have multiple policies, you become a much more valuable customer to them, so mistakes don’t matter as much.
One of the downsides of bundling your insurance policies is that you have far fewer options when it comes to choosing a company. The insurance companies that offer bundled plans tend to be a large national companies, instead of smaller regional companies. This means you may not have as many places to choose from and you may end up getting higher rates even with a discount. It also makes it very difficult to compare rates between companies when three policies are bundled together, because you don’t know how much you’re paying for each policy individually. The process of getting a quote for an insurance bundle it’s going to take much longer and be more involved than if you were to just look at one policy at a time.
Everyone has different needs when it comes to life insurance. Some people only need life insurance to cover their funeral costs, while other people need enough money to cover their debts or support their family. When you buy a life insurance policy by itself, you can work with the insurance agent to choose a policy that best fits your need. However, when you are shopping for bundled insurance, you may not have the options you need available in a bundle. You may have to sacrifice the coverage you need to get your insurance plans in a bundle, which isn’t recommended. On top of that, if you have any special circumstances, like a chronic illness or unique financial history, you may not be able to find a life insurance policy in a bundle that will accommodate you.
When shopping for your insurance plans, it makes sense to talk to an independent insurance agency to compare your options. They will help you determine if you can get the coverage you need through a bundled plan and if a bundled plan makes financial sense for you.