One for all? Pros and cons of bundling your voluntary insurance products

When you’re trying to come up with the best value for the best dollar on your voluntary insurance prices, you may be offered a price break for buying several products from the same vendor. Known as bundling, that practice can be a win-win for both buyer and seller under the right circumstances.

“If you’re looking for the easiest way to save money on insurance premiums, bundling your policies is probably the best bet,” advises Laura Adams in Huffpost. “However, as with all things insurance, the depth of those savings will vary depending on what you’re bundling and where you live.”

All told, bundling comes with its own set of pros and cons.

One lump price or piecemeal policies?

When weighing whether a bundled package of insurance is your best option, consider these possible advantages:

Cost savings

As mentioned, bundling can result in significant discounts, especially for consumers who are healthy and live safe and responsible lifestyles.

Easy sign-up

Once you’ve established one kind of insurance with a given company, it’s relatively easy to apply your information toward securing a different kind. Often, you can register without having to (again) dig up all kinds of personal data.

Easier management

Premiums will be easier to track and pay, since your bill will come in one consolidated statement rather than in multiple emails or envelopes. “Bundling policies makes maintaining statements and policy renewals a breeze,” advises Jayson Greene in Huffpost.

Claim forgiveness

Because bundling makes you a more valuable insurance customer, the vendor is less apt to raise your rates (or even drop you as a client) after you make large claims.

On the other side of the coin, however, you should also mull these possible disadvantages to bundling your policies: 

Unused benefits

When bundling comes into play, you may end up buying insurance you’ll never use. For example, many dental and vision plans come with such high deductibles that the cost of their premiums will outweigh your out-of-pocket costs. 

Muddled details

You’ll need to pay attention to the fine print in each insurance agreement to make sure you’re clear on the benefits and cost structures involved. Along the way, added charges or changes in coverage could negate the savings you gain by combining policies. Look for hidden qualifiers, exclusions or conditions or hikes in premiums after an initial introductory offer. “One of the drawbacks to bundling is the resultant neglect by consumers to continue price shopping,” notes “Many consumers are lulled into a false sense of security once they bundle and fail to revisit their policies when it is time to renew.” 

Different levels of risk can impact costs

For example, if you’re in impeccable health but work as a logger, the savings you realize from your health insurance may be a pittance compared to your life insurance costs. You may be better off financially if you shop around for separate health and life policies and factor in long-term costs.  

Fewer vendor choices

Because bundling plans tend to involve large national insurance companies, you likely won’t have the option of buying from small regional companies. 

Difficulty in comparing apples to apples

Comparing rates with other insurance providers can be trickier when you’re quoted one bundled price. 

Less customization

When you buy individual policies, you may find it easier to work with your insurance rep to cherry-pick the terms and coverage that match your needs and budget most closely. When bundling, you’re apt to have much less flexibility.

Lack of carrier expertise

In some cases, a company with expertise in one form of insurance will subcontract with other niche carriers so it can offer several different policies at one favorable price. However, the involvement of many different vendors can lead to inefficiencies, delays in claims administration or other customer service issues — and your primary carrier may not know as much about the outsourced policies. 

Have more questions about the value of bundling versus buying individual policies? Talk to the specialists at Ochs to learn more about getting the best possible value for your voluntary insurance dollar.