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Can you have more than one Life insurance Policy?
The plain and simple answer is YES, you can get as many life insurance policies as you would like. However, there are some limitations, but they have more to do with the total amount of life insurance coverage you are allowed to have in force.
For most people, this will usually not be an issue since the guidelines are pretty generous.
Life insurance companies understand you want to leave behind more than enough in the event you were to suddenly pass…
The most common question that people ask when it comes to owning multiple life insurance policies is whether or not it’s legal. We’re happy to tell you that not only is having multiple different life insurance policies perfectly legal, it often times makes a lot of financial sense.
Life insurance is built for protection. It can protect your loved ones from financial turmoil in the unfortunate event that you were to die early. While the topic of life insurance can get quite confusing if you dive into it deeply, its overall premise is actually quite simple.
It is quite common for people to acquire more than one life insurance policy in their lifetime. In some instances, we have clients that will purchase a large term policy to cover the most crucial years and a smaller permanent one to have protection when the term expires, usually for final expenses or wealth transfer.
Others simply need more life insurance.
When Should You Carry Multiple Life Insurance Policies?
Life insurance is a wonderful tool that spares your loved ones some of the pain of losing your income and support. But as with many insurance matters, the terminology can be confusing to many people.
Complicating matters, life insurance comes in two basic forms that have many different names and different degrees of coverage. The question most people ask is whether they need term life or whole life. Once you get around the confusing terms and understand important differences, term life and whole life are easier to grasp.
The most basic definitions are the simplest:term life lasts for a specified term of your life; whole life lasts for the rest of your life. In both policies, your beneficiaries receive your death benefit when you die. The main differences lie in the duration of the two forms of life insurance and some of the built-in features available
Owning Multiple Term Life or Whole Life Policies Often Makes Sense
Term life covers you for a limited time—the life of the policy. The term of a term life policy could be anywhere from one month to 30 years. That’s about all term life does—pay a death benefit when you die. You have to work out the terms of the policy.
But term life is generally aimed at younger consumers, and often those customers outgrow their term life policies. If you buy a policy at 25 and name your mom and your spouse as beneficiaries, you can later change the policy to include future children.
But the overall terms will remain the same—your designated beneficiaries would end up with fewer benefits from your life insurance policy. Consequently, some term life policies allow you to switch to whole life down the road.
Business owners and multiple life insurance policies
If you are a business director working for a limited company, then you may be able to benefit from running your life insurance through the business. This type of policy is called a relevant life policy and can offset against corporation tax. It also does not require income tax or national insurance to be paid on the premiums.
A relevant life policy is put into a trust so that you can choose who receives the money. The pay-out is also not subject to inheritance tax.
Need More Life Insurance But Don't Want Exams?
It is very common that people reach out to us after buying a bigger home or having another child and needing to get some additional life insurance on top of what they currently have.
And because it is not their first rodeo they can be hesitant since they know most life insurance plan take a lot of paperwork, a medical exam and long approval times.
Luckily, there are companies now offering up to $1 million dollars of life insurance without a medical examination. You can complete a 10 minute application, sign the policy electronically and get approved within 10 minutes to few days.