How many life insurance policies can you have? Can I have more than one life insurance policy?
How many life insurance policies can you have?
If you already have life insurance but think you need more coverage, you may wonder whether getting more than one life insurance policy is possible.
You are allowed to carry more than one policy, but that doesn’t mean you need to have many. It’s sometimes best to have a single policy that meets all of your needs.
On the surface, having more than one policy sounds like a great idea, but there are times when it’s not necessary to have multiple policies. It all depends on your needs and circumstances.
So here are the facts about how many life insurance policies you can have. This guide will examine your options and whether you should consider having more than one policy.
Table of contents
- Can I have more than one life insurance policy?
- Do I need to have more than one life insurance policy?
- Why would I want multiple life insurance policies?
- When should I consider carrying multiple life insurance policies?
- Can I change my existing life insurance policy if my needs change?
- Can I cancel an existing life insurance policy and get a new one?
- Are there alternatives to buying multiple life insurance policies?
- Benefits and disadvantages of holding multiple policies
- Frequently asked questions about life insurance
- Life insurance cost
Can I have more than one life insurance policy?
Yes, you can carry more than one life insurance policy. No law prevents you from having a varied combination of life insurance arrangements.
While many people are satisfied by the protection they receive with one policy, having multiple life insurance policies can prove beneficial in certain circumstances.
Do I need to have more than one life insurance policy?
While you’re allowed to have more than one life insurance policy, the decision is only advisable if it suits your requirements.
Your premiums are based upon the information you disclose about the state of your health history when you take out a policy. In that respect, you are not guaranteed the same rate with a new additional policy. As your age increases, so will your premiums.
Instead, many people prefer to adapt their existing policies according to their changing needs. For example, you may be able to make policy changes and add to your existing coverage.
Why would I want multiple life insurance policies?
Buying multiple life insurance policies comes down to personal choices.
If you have changing needs based on the situations below, you may wish to take out an additional life insurance policy.
- You want to take out two single life insurance policies rather than a joint policy.
- You’ve made positive health changes (you no longer smoke, for example), so you want to consider opting for better premiums while you keep hold of your old policy.
- You may need to get maximum coverage for new financial responsibilities if your present arrangement doesn’t cover them (like your child’s education fees or a mortgage).
- You have more than one protection shortfall. For example, you might want decreasing insurance to protect a repayment mortgage and level cover for family protection.
When should I consider carrying multiple life insurance policies?
Life insurance is typically used to financially support a deceased’s dependents in the event of death. One life insurance policy can accomplish this on its own, but there are a handful of situations when multiple life insurance policies may be advantageous.
Having children, buying your first home, or even starting a new business are all life-changing events that bring new financial demands that an existing policy may not cover.
In this case, buying a new life insurance policy and carrying multiple policies can help cover these new expenses. Beneficially, this option may be cheaper than increasing the coverage limit on your existing policy.
However, you should always consult your financial advisor or quote additional coverage before buying a new policy.
Life-changing events are generally the best time to review your current life insurance policy.
In this case, having both term life and permanent life insurance can be advantageous.
You can buy a separate term life policy to protect your family (while still dependent on your income) instead of carrying more coverage on a permanent life policy.
With this option, you can use your permanent life policy to leave your family with a financial safety net after they no longer depend on you.
Long-term care rider
To a similar effect, having one life insurance policy that covers your dependents and a separate life insurance policy that includes a long-term care rider may make sense.
A long-term care rider on your policy allows you to use the death benefit to pay for any care you need as you age.
Beneficially, if you do not need long-term care, your beneficiaries still get the full payout.
Long-term financial plans
Having multiple term life insurance policies (with term lengths of 10 to 30 years) may save you more on premiums than buying one policy with more coverage.
This case allows you to carry more coverage on a 10-year term policy than a 20-year and more on a 20-year policy than a 30-year.
Known as laddering, this strategy provides an insured with more coverage earlier in life when expenses are higher and less coverage later in life when there are fewer expenses and less debt.
NB: The ladder strategy requires particular expertise and heavy management. You should consider hiring a financial advisor if you’re interested in laddering instead of facing it alone.
Final note: If your current term life policy would only cover a portion of your final expenses, you may want multiple life insurance policies.
You can supplement your term policy with final expense insurance to ensure your family won’t be left behind covering your funeral and other end-of-life expenses.
Can I change my existing life insurance policy if my needs change?
It’s always wise to look out for ‘guaranteed insurability’ when you take out your first life insurance policy.
This feature usually allows an insured to increase the existing policy’s cover for certain life-changing events, including the following.
- Remortgaging or taking out a new mortgage
- Entering a civil partnership or getting married
- Becoming a parent (by having or adopting a child or stepchild)
- Getting a significant pay rise by change of employment or promotion.
Tip: check what your policy does and doesn’t cover, as this can vary between insurers.
You’re only usually eligible to make amendments to your policy for a certain period as specified by your insurance.
In addition, there are likely to be age limits and a cap on how much you can increase your coverage. Generally, guaranteed insurability ensures your cover is aligned with your current protection needs.
Can I cancel an existing life insurance policy and get a new one?
If your needs and, therefore, your protection needs change, you might consider canceling your policy and buying a new one. In general, this needs to be well considered, primarily for two reasons.
It might end up costing you more because life insurance premiums are correlated with your age. Your original policy will naturally be cheaper as you were younger when you took it out.
It may be difficult to get new coverage if you develop a health condition after taking out the original policy.
Tip: Never cancel an existing policy until you’ve been approved for a new one. Before making a new purchase, always check you’ll be able to live with the amount you will have to pay.
Are there alternatives to buying multiple life insurance policies?
As this guide discusses, there are alternatives to having more than one life insurance policy. In summary, these alternative options are:
- Adding guaranteed insurability. You can increase your coverage to meet your needs as time progresses and your financial obligations change.
- Converting term life. You can convert any amount of your existing term life insurance into whole life insurance.
- Using riders. You can use riders such as term riders or accidental death riders. You can add these riders to a base life insurance policy rather than buying separate coverage.
In any case, ask an experienced insurance agent for advice on whether you need one life insurance policy or multiple life insurance policies.
You can ask to make other policy changes, such as changing the amount of cover, the length of the policy term, switching from joint to single policies, or even changing when you pay your premiums (from monthly to annually).
Benefits and disadvantages of holding multiple policies
To summarize, here are some of the benefits and disadvantages of holding multiple policies.
- You can diversify your coverage across providers.
- It’s cost-effective as you only pay for coverage when you need it.
- Multiple policies can protect different needs and goals with matching coverage.
- This option allows you to add coverage as your needs and financial obligations change.
- Multiple premium payments will be taken out monthly.
- Policies added later in life mean more expensive premiums.
- Multiple policies mean more paperwork and multiple contracts to manage.
Look out for ‘guaranteed insurability’ when you take out your first life insurance policy to ensure your cover can change when your needs do.
You can take out more than one policy if your existing life insurance policy no longer meets your needs.
It's worth understanding your options first, as it can be easier (and sometimes cheaper) to amend your existing policy instead of having multiple policies.
You can amend your existing life insurance coverage or “ladder” your policy to suit decreasing needs.
You can add riders to a base life insurance policy rather than buying separate coverage.
Contact an insurance agent for advice if you’re unsure whether you need one or multiple life insurance policies.
Frequently asked questions about life insurance
Can I have multiple life insurance policies with more than one provider?
Yes, you can take out any number of life insurance policies with more than one insurance provider. It’s not against the law, and it will be possible to claim against each policy.
Remember, you may get a better deal if you stick with one provider as they may offer you discounts for taking out additional cover.
How many life insurance policies can I have?
There is no legal limit to how many life insurance policies you can have. But remember, adapting your existing policy is possible if your financial situation changes.
While you can have multiple policies, you may have other options.
Will all policies pay out in full in the event of death?
Yes. It’s possible to claim on multiple policies, and the death benefits of each will be paid out as per individual policy’s conditions and exclusions.
Life insurance policies do not adjust benefits for other separate coverage that is in place.
Do I need to carry multiple life insurance policies if I’m married?
If you have dependent children or one of you relies on the other’s income, you should consider multiple policies as a married couple.
You can buy joint life insurance or two separate insurance policies. The joint option is a permanent life insurance policy that will provide coverage for both of you.
The cost of a joint policy and two separate ones varies, so it’s best to talk to your financial advisor or insurance agent first or get a quote.
Life insurance cost
A wide range of factors determines the cost of a life insurance policy.
The determining factors include age and gender, medical history, and the type and amount of coverage that is required.
The following factors define the cost of life insurance:
- The required insured amount
- Personal details such as your age and gender
- Past and current medical history and any pre-existing conditions
The failure to have life insurance can cause financial suffering to those left behind. That’s why Pitsas Insurances offer competitive life insurance packages for those wanting to protect their family or loved ones in the event of death.
We can help you safeguard your family, and we offer insurance packages suited to every need.
Life insurance quote
Why choose life insurance with Pitsas Insurances?
- Beneficial tax benefits
- Customizable package options
- Immediate mortgage payment coverage
- Coverage for your children’s education fees
- Considerable financial income for your family members
- Save up to 25% and connect the policy with your medical insurance.
For more information about Pitsas Insurances life insurance plans, visit our site.
To get a quote, you can complete the questionnaire.