When discussing insurance products, you might have come across the concept of ‘bundling’ of insurance policies. Bundling of insurance policies is quite common these days mainly owing to the fact that it holds benefits for both – the insurer and the insured individual. A common example of bundling goes like this – you own two bikes and decide to buy both bike insurance policies from the same insurance provider. Or, you get your health insurance and motor insurance coverage from the same insurer. The list can go on and on.
So, is the bundling of insurance policies a good idea?
Let’s take a closer look at what bundling entails and how it benefits the insured individual and the insurance provider.
What is meant by ‘bundling’ of insurance plans?
Most of us buy more than a single insurance policy. For instance, you might buy health insurance and car insurance. It would probably seem convenient to buy both insurance products from the same insurer. Buying more than a single insurance product at the same time from the same insurance provider will lead to the bundling of policies. Both you and the insurer benefit from this bundling; let’s see how.
Benefits of bundling of insurance plans
There are many benefits to bundling of insurance plans for the insurance company and the policyholder.
- Benefits for the policyholder
When opting to bundle plans, the policyholder will usually get discounts on the premiums they pay for coverage. These discounts can go quite high depending on the savings made. You may get a discount on each subsequent insurance plan you add to the bundle. Moreover, bunding of insurance plans is also incredibly convenient for the policyholder. You get all your coverage from one insurer whom you trust. You have one phone number to call in case of an emergency or a claim. That kind of convenience can truly ease out the whole process of raising claims for you. Plus, insurance renewal too will be really easy and you will mostly have to make a single payment for all bundled policies instead of making multiple payments to different insurance companies.
- Benefits for the insurer
There is a reason why insurance companies offer discounts on bundled policies – they too benefit in many ways. To begin with, when customers opt to bundle policies, the insurer makes a sale of more than a single product at one go. This helps them financially, thus, they benefit a lot even though they give a discount. Plus, customers will usually end up renewing coverage with the same insurer in the coming year (unless they have had a negative experience). In the case of bundled policies, multiple coverages will be renewed at one go.
Thus, we see how the bundling of insurance policies is a win-win situation for both sides, the insurer and the insured individual. Do speak to your insurance company about what offers they can give you if you opt to bundle up policies when you buy or renew your general insurance coverage.
We hope that this article has helped improve your understanding of the concept of bundling in insurance.
Remember to always review your insurance plans regularly to stay covered and protected.