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Can You Have Multiple Life Insurance Policies?

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This question is one that is asked commonly on the Internet.  As we look at the answer and possible ramifications involved, it gives way to some interesting strategies.  Follow along as we attempt to tackle this interesting concept.

Yes

While you can’t apply this logic to other types of insurance policies, you can certainly purchase more than one life insurance policy.  By all means, you can have multiple life insurance policies.

Many experts advise consumers to take out more life insurance policies.  It can be part of a sound financial plan, as your needs will change.  Thus, as you continue to reassess your life insurance needs (as you should be doing, of course), you might find that getting more coverage is a good idea.

Thankfully, you can feel free to get all of the life insurance you need, unless otherwise stated in the policy.  It can be quite common to have more than one, as present with many who receive this insurance through their employer.

Advantages and Strategies

Some of the advantages are quite simple.  Yes, more life insurance policies equals increased coverage.

This gives way to the simplest strategy, as we have briefly identified.  For instance, perhaps you just had a job promotion or bought a new house.  Thus, you must weigh the risks that are involved; i.e. in ensuring that your family will be able to make the mortgage payments if something were to happen to you.  If this is so, you might have good reason to take out another policy, instead of mitigating the rates you locked in X amount of years ago with your main policy.

There are more advanced strategies involved as well; and don’t worry, it’s not that complicated.  For instance, it is common to take out a term life insurance policy to cover yourself against short-term risks.  However, why wait?  You could potentially combine a term life insurance policy with a higher amount to that of a smaller life insurance policy.

 

Be Aware

It sounds great, right?  Yet you should be aware of potential drawbacks that can be involved:

  • Complex: It’s bad enough juggling credit cards; imagine having five different life insurance policies.  Also, if you’re reaching for other life insurance plans, you might take a chance on a company that could go under before you do.
  • Costs: You pay policy fees when you take out a policy; that is built into your life insurance premiums.  If you have multiple life insurance plans, you are likely paying more than you would if all of that coverage was in one plan.

Be careful, but not afraid, of the possibility of multiple life insurance policies.

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