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A High Value Insurance or Multiple Plans: Which is the Better Investment?

Life Insurance plans have become an inevitable part of life which not only allows maintaining the pace of ever growing requirements of life but also assure a safe future to the loved ones. It secures the future without compromising the present.  But it could be really tricky to decide which insurance plan would work the best – only one high value life insurance plan or multiple plans.

High Value Life Insurance Plan

While looking for a life insurance plan, people habitually go for the one with the best coverage and benefits and yet easy on the premiums. It is believed that the bigger, the better. People mostly seek for the pricey life insurance plans which would provide bigger coverage to life and even insure the beneficiaries in case of any mishap.

Advantages of High Value Insurance Plan:

  • One term high valued insurance plans are, no doubt, easy to handle as far as the requirements of the insurer fits within its frame.
  • The insurer just has to pay a yearly premium and hence, makes it easier to keep track.
  • Moreover, if calculated in terms of premium, e.g., a1 Crore life insurance for 30 years costs a yearly premium of around 15000 whereas, two 50 Lacks insurances for 30 years would cost more than 18000, thus, the insurer pays less in case of a single high valued insurance.

However, paying lesser premiums should not be the souldecisive factor.

Disadvantages of a High Value Insurance Plan:

  • No two persons have the same life style or the same requirements in life. Since, the insurance plans cover only the general accounts of people; it might be possible that every necessity of every insurer may not be covered efficiently by a single life insurance plan.
  • Besides, having single high value insurance plan also enhances the risk of losing the whole amount of money at once due to claim rejection by the insurance company.

Multiple Insurance Plans

It is true that having a long time and high value life insurance plan is cheaper, whereas, multiple life insurance plans can be a little tough on pockets. But at the same time, multiple insurance plans can offer wide range of choices to the insurer. The insurer is free to choose different insurance policies according to his varied needs.

Why Should People Invest In Multiple Life Insurance Plans Instead Of One High Value Life Insurance Plan?

  • Low Risk Factor In Case Of Claim Rejection By An Insurance Company– The major and foremost advantage of having multiple insurance plans is the distribution of money into small parts which reduces the chance of huge loss of money at one strike. In spite of declaring all personal information correctly to the company, it sometimes happens that the claims made by the insurer or the beneficiary, on the behalf of the insurer, get rejected by the insurance companies. So, it can be really advisable to invest in multiple insurances instead of traditional high value insurance. Even if the claims are discarded by one company and approved by other companies the insurer does not have to lose the whole lot of money.
  • Different Times Of Maturities Of Multiple Insurances– Multiple insurance plans allows the insurer to receive various maturity sums at various stages of life. Receiving a good sum of money at different intervals surely makes life a lot smoother. In fact, a person can plan his responsibilities according to the insurance maturities.
  • Flexibility Of The Term Plans– The insurer remains free to choose the sum of money being insured and the time of its maturity in case of planning multiple life insurances unlike the conventional life insurances. The high value life insurances are not desirable to break or surrender beforethe completion of its term period. It will leave the insurer with huge amount of losses. The insurer might even lose more than 50% of the money, already paid as premiums. Therefore, long term and high value insurance plans often prove to be imprudent in compared to short term and multiple insurance plans.
  • Dividing The Big Coverage Into Small Parts– It is always prudential and wise to divide one’s large sum of investment into small ones. In fact, the larger the sum the more divisions of the sum should be made by the insurer to avoid the already mentioned dangers of losing the sum. It offers the same coverage or more but with relatively negligible risk factors.

Also Read: Top 4 Advanced Life Insurance Policies in 2018

Disadvantage Of Multiple Insurance Plans:

  • Regardless of all the above advantages of multiple insurance plans, one cannot rule out the disadvantage of paying high expenses in maintaining of several numbers of insurance policies.
  • Moreover, in this fast-moving life it could be really difficult to keep track of the multiple insurances, their dates, premiums and maturities.

It is clearly evident that both forms of investment plans, be it high value insurance or multiple insurance plans, have their own pros and cons. Hence, the necessity of an insurer should be the decisive factor in choosing the better of the two.

Ajeet Sharma, the founder of Financegab and a well-known name in the field of financial blogging. Blogging since 2017, he has the expertise and excellent knowledge about personal finance. Financegab is all about personal finance which aims to create awareness among people about personal finance and help them to make smart, well-informed financial decisions.


  1. Content like this is a great change of pace for me. I like articles that have original thoughts that people can relate to and understand.

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