Sometimes people may like to insure themselves as well as their elders and children. Question thus relates to obtaining multiple life insurance policy instead of individual insurance policy. Reason is that the people often like to insure their parents and children with them. It gives them a sense of rare security for the entire family.

Is it Possible?

Pertinent question for anyone is whether getting such multiple policies instead of the individual life insurance policy is really possible. Of course it is possible and one can really hold the life insurance on anyone that relies on them for any type of financial supports. Yet it would be good to wait till the child reaches his or her adulthood.

The Purpose

Real purpose of obtaining any insurance policy is replacement of lost income. Children do not have any income and so the question of replacement does not arise in their cases. That is why life insurance may not be required for the children ordinarily. But if the parents require adding the children in the form of riders in the policy or wish to have a separate policy for their benefit, it will be possible.

Trading or Replacing Policy

If one has an active life insurance policy, thinking about replacing or trading the same may be considered at times. Some of the reasons for which one would like to change or trade the life insurance policy would be –

• When someone is marrying and having a new partner in life;
• If someone is losing a partner by way of divorce ant his or her life changes;
• Addition of new members in the family through child birth;
• When someone purchases a new home or shifts over to a new residence;
• For refinancing the existing home;
• Due to change of health and occurrence of some pre-existing conditions;
  
• For the purpose of caring for elderly persons and other such family members;
• For early retirement of the insured;
• Promotion or such occurrences changing the financial status;
• Due to receipt of an inheritance.

Obtaining Financial Advice

It is always a prudent move obtaining the guidance from a professional and expert financial adviser before changing life insurance policy. Finding the best alternative would be necessary and experts can guide the clients through the process of obtaining the plan appropriately.

Concept of Cash Surrender Value

When the insured decides to give up the policy before its maturity, the amount of money he or she gets back is the cash surrender value for the policy. Method of calculating such cash surrender value is –
Current cash value of the policy – (surrender charges + monthly contract charges + outstanding loans, if any) + interest accrued.
To illustrate; if the current cash value of the policy is $50,000 and the combination of surrender charges, monthly contract and outstanding loans are $20,000 and accrued interest is $2,500; then the calculation would be as follows –
$50,000- $20,000 + $2,500 = $32,500, which would be the cash surrender value of the life insurance policy relinquished.

Cutting Down Life Insurance Costs

One of the constraints that accompany the traditional life insurance policies is the cost involved. However, there are certain ways of cutting down the costs effectively. Some methods of reducing life insurance costs are –

• Shopping around to compare and contrast different policies. Prices vary widely and one can easily get the least priced yet equally effective life insurance policy in the process.
• Buying a little more than what is required can cut down the costs substantially. Often the rates drop after a certain level and passing that level is important.
• Choosing a customer friendly insurance company would be good solution to the problem. Some of the companies do not charge higher costs due to pre-existing medical conditions from the clients.
• Living a healthy life would really help cutting down the costs with any of the providers.
• Paying premiums up front instead of paying the monthly installments will help avoid hidden fees and at the same time pay fees in the long run.
• Buying a guaranteed renewable policy while buying the term insurance could be a good move.

However, the best way of cutting down the costs on life insurance policies would be going for the multiple life insurance policy instead of the individual one. It will be one premium in lieu of multiple policies for multiple benefits.