Is it best to combine life and auto insurance?
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UPDATED: Apr 16, 2019
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When you own a car, having an auto insurance policy is basically a fact of life. While you could try to get by without one, you’ll be doing so in violation of the law and risking a lot financially.
Since everyone with a car is required to have auto insurance, saving money on auto insurance is a priority for many people.
One way that some individuals attempt to save money on auto insurance is by combining multiple policies under the same insurance company. For example, they get both their life and auto insurance from the same insurance agent. The usefulness of this strategy can vary from one case to the next.
If you’re interested in implementing this strategy, get online and start shopping for auto insurance companies that offer both of these products.
How it Works
The basic idea behind using this strategy is that the insured purchases multiple policies from the same insurance company. It works under the same principle of saving money by purchasing in bulk.
Instead of buying policies from different insurance companies, you simply get them all from the same place.
Some insurance companies offer mult-line discounts for this type of purchase. This means that if you already have some kind of policy with them, they’ll give you a discount on the next policy that you buy from them.
The ultimate goal of offering these multi-line discounts is that the insurance companies hope to create brand loyalty.
If they can get you to buy all of your insurance policies from them, they will be able to make much more money overall.
They figure that if you get used to using them for all of your policies, it will be much more inconvenient for you to switch to another insurance carrier down the road.
The amount that you could save with a multi-line discount from an insurance company can vary significantly from one case to the next. Some insurance companies may give you a one percent discount on one of your policies, while others may give you 10 percent off or more.
Every insurance company has different policies and procedures for this type of discount.
Although getting multiple insurance policies from the same insurance company is a valid way to save money, there is some debate about how much difference a life insurance policy can make when it comes to saving money.
Life insurance policies are generally one of the least expensive policies you can buy.
The premiums are smaller than with almost any other type of policy you can get. This means that insurance companies aren’t as interested in selling these policies as they are auto, home, business and disability policies.
If you already have an auto insurance policy and you add a life insurance policy, the impact on your premiums may be minimal or there may be no impact at all.
The real discounts from insurance companies come in when you combine some of your bigger insurance policies together.
For example, if you switch your homeowner’s insurance policy over to the same company where you have car insurance, you may be able to get a discount.
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Type of Life Policy
The type of life policy that you buy can also have an impact on how much you save with this method. Some life insurance policies are much more profitable than others for insurance companies.
For example, if you are young and you buy a 20-year term life insurance policy, you might pay less than $20 per month in premiums.
By comparison, if you are over 50 years old and you want a whole life insurance policy, your monthly premium could be over $1,000 per month, depending on your health. Insurance companies are more likely to give discounts for products that they will make a lot of money on.
Purchasing a more expensive policy will make it more likely that you’ll receive a discount on your auto insurance.
If you find yourself in a situation where you want to save money on your auto insurance, shopping around is one of the best things that you can do.
Get information about your current auto insurance policy, your life policy and any other insurance that you have. Then take these documents to other agents in your area to get quotes.
In some cases, other insurance companies will be more likely to give you a discount when you buy all of your policies at once like this. They may also try to simply beat the rates that you’re getting from your existing insurance company just so that they can secure you as a customer.
There is no right answer for everyone in this situation when it comes to combining insurance policies under the same company. When saving money on your auto insurance is important, you should check with your insurance company to see if combining your policies will make much of a difference.
If not, check with some other insurance companies in your area to see what they can do for you. At that point, you’ll be able to make an educated decision that is in your best interest.
Instead of just focusing on your life and auto policies, see what you can get by offering all of your insurance policies to a single company.
This leverage may be able to score you a great deal on your rates overall. Start the process today by getting online and comparing insurance policy rates in the market.