How Many Life Insurance Policies Can You Have?
Learn how many life insurance policies you can take out and how to do it with our guide.
Our content follows strict guidelines for editorial accuracy and integrity. Learn about our and how we make money.
Life insurance is an important part of financial planning, but it can be confusing to know how much coverage you need.
The great thing is that you can have multiple life insurance policies for different periods, expenses, and reasons.
This article will go over how many life insurance policies you can have, what your options are, and what to consider when choosing them.
Can You Have Multiple Life Insurance Policies?
Yes, you can have multiple life insurance policies. In fact, you may even be encouraged to do so by your financial planner or life insurance agent.
Many people have multiple life insurance policies for different purposes. Some people choose to have both permanent and term life insurance. Others buy several term life insurance policies to cover them at different stages of their life.
The number of life insurance policies you should have, depends on your personal situation and financial goals. Some people only need one policy, while others find that multiple policies work best for them.
If you're not sure how many life insurance policies you need, talk to a financial planner or life insurance agent. They can help you figure out the best coverage for your needs.
What Are the Reasons to Get More than One Life Insurance Policy?
There are lots of reasons why you might want multiple life insurance policies. Here are a few reasons that people have:
To cover different types of risks: You may want one policy that covers you in case of death, and another policy that covers you in case of disability.
To cover different time periods: You may want a term life insurance policy for a specific period of time, like 10 or 20 years. Or you may prefer a permanent life insurance policy that covers you for your entire life.
To cover different types of expenses: You may want one policy that will pay for your funeral and another policy to provide an income for your family.
To get different types of benefits: You may want a policy that offers you cash value that you can borrow against, and another policy that doesn't have cash value, but is cheaper.
To get additional coverage: There are situations or times in your life when your financial obligations may increase. For example, if you have a child. In these situations, it’s a good idea to get additional coverage.
There are many reasons why you might want to have more than one life insurance policy. The key is to figure out what coverage you need and then find the right policies to meet your needs.
Our agents can help. Reach out to us at 1-888-912-2132 or help@policyscout.com to get advice and guidance about life cover.
Source: Pexels
Different Types of Insurance Policies You Can Buy
There are multiple types of life insurance plans that you can get and some are purposefully designed for certain circumstances.
These plans will cover specific costs such as paying off a mortgage or paying for your funeral expenses. In some cases, it will make sense to get multiple policies and to get more coverage for these costs.
The first distinction you should know about when it comes to insurance, is term vs. permanent life insurance.
Term Life Insurance
Term life insurance is designed to provide financial protection for a specific period of time, usually 10, 20, or 30 years.
If the policyholder dies during the term of the policy, the death benefit will be paid to the named beneficiary. If the insured does not die during the term, the policy will expire and no benefits will be paid.
Permanent Life Insurance
Permanent life insurance, also known as whole life insurance, provides coverage for the insured’s entire lifetime.
As long as the premiums are paid, the policy will remain in force. Permanent life insurance policies build cash value over time, which the policyholder can borrow against or cash in.
Source: Pexels
Term Life Insurance Plans
Here are some of the different term life insurance plans you can buy these days:
Level Term Life InsuranceLevel term life insurance policies provide death benefits that remain level for a specific period of time. The premiums are also level for the duration of the term.
Decreasing Term Life InsuranceDecreasing term life insurance policies have death benefits that decrease over time, while the premiums remain level.
This type of policy is often used to cover a specific debt, such as a mortgage, which will be paid off over time.
Annual Renewable Term Life InsuranceAnnual renewable term life insurance policies provide coverage for one year at a time. The death benefit and the premium are both reset at the end of each policy year.
Convertible Life InsuranceConvertible life insurance policies can be converted to permanent coverage without evidence of insurability.
Source: Unsplash
Permanent Life Insurance Plans
Permanent life insurance, also sometimes called whole life insurance, provides coverage for the insured’s entire lifetime.
As long as the premiums are paid, the policy will remain in force. Permanent life insurance policies build cash value over time, which the policyholder can borrow against or cash in.
Whole Life Insurance
Whole life insurance is the original permanent life insurance policy. It combines death protection with a savings element, which grows cash value over time. The cash value can be used to help pay premiums or borrowed against in times of need.
Universal Life Insurance
Universal life insurance is a type of permanent life insurance that offers flexible premiums and death benefits. The policyholder can choose to increase or decrease the premium payments, as well as the death benefit, subject to certain limits. The cash value of a universal life policy increases over time.
Variable Universal Life Insurance
Variable universal life insurance is a type of permanent life insurance policy that offers flexible premiums and death benefits.
The policyholder can choose to increase or decrease the premium payments, as well as the death benefit, subject to certain limits.
The cash value of a variable universal life policy grows based on the performance of the underlying investment options.
Indexed Universal Life Insurance
Indexed universal life insurance is a type of permanent life insurance that offers flexible premiums and death benefits.
The cash value of an indexed universal life policy grows based on the performance of a stock market index, such as the S&P 500 or Dow Jones.
Final Expense Insurance
Final expense insurance is a type of whole life insurance that is specifically designed to cover end-of-life expenses, such as funeral costs and outstanding debts.
This type of policy typically has smaller death benefits and lower premiums than other types of life insurance.
Buying vs. Renting a stair lift
Some companies also offer rental and leasing options, which can be a more budget-friendly option for those who only need a stair lift on a short-term basis.
Renting a stair lift: This may be more affordable, however, you’ll have to keep up with monthly payments if you want to keep the stair lift in your home.
Buying a stair lift: You will be able to keep your stair lift for as long as you want and if you buy it outright, you won’t have to pay monthly fees to keep it.
Some companies also offer financing so that you can buy your stair lift and you can pay it off over an extended period.
Other Types of Life Cover
AD&D Cover
Accidental death and dismemberment (AD&D) cover is a type of life insurance that pays benefits in the event of accidental death or injury. AD&D policies typically have lower premiums than other types of life insurance.
Critical Illness Cover
Critical illness cover is a type of life insurance that pays benefits if the policyholder is diagnosed with a covered critical illness, such as cancer, heart disease, or stroke.
Long-Term Care Insurance
Long-term care insurance is a type of insurance that pays for long-term care services, such as home care, assisted living, and nursing home care.
Disability Cover
Disability cover is a type of insurance that pays benefits if the policyholder becomes disabled and is unable to work.
Group Life Insurance Cover
Group life insurance is a type of life insurance that is provided by an employer. Group life insurance policies typically have lower premiums than individual life insurance policies.
Voluntary Life Insurance
Voluntary life insurance is a type of life insurance that is purchased by the policyholder, rather than being provided by an employer.
No Medical Exam Life Insurance
No medical exam life insurance is a type of life insurance that does not require a medical exam. This type of policy is typically more expensive than other types of life insurance.
Joint Life Insurance
Joint life insurance is a type of life insurance that covers two people, typically a married couple. Joint life insurance coverage typically has lower premiums than two separate life insurance policies.
Survivorship Policies
Survivorship policies, also known as second-to-die policies, are types of life insurance that pay benefits upon the death of the second policyholder. Survivorship policies are typically used to help cover estate taxes.
Key Man Insurance
Key man insurance is a type of life insurance that is purchased by a business to insure the life of a key employee. Key man insurance coverage typically has higher premiums than other types of life insurance.
As you can see, there are loads of life insurance plans to choose from, and the great thing is that you can get as much coverage as you want or need by purchasing different types of life insurance.
Source: Pexels
Is It Okay to Apply to Multiple Insurers at Once?
It’s perfectly fine to apply for life insurance with multiple insurers at the same time. In fact, it's often the best way to compare prices and benefits.
When you apply for life insurance with multiple insurers, you're more likely to find a better deal. That's because each insurer uses different underwriting criteria and offers different life insurance rates.
So if you apply to several insurers, you're more likely to find the one that offers the best rate for you.
Of course, you don't want to apply to too many insurers at once. That could be seen as a sign of poor health, and it could make it harder to get approved for coverage.
A good rule of thumb is to apply to three or four insurers at a time. That way, you'll have a good chance of getting the best rate without raising any red flags.
Source: Pexels
What Factors Should I Consider When Getting Life Insurance?
When you’re trying to determine how much and what types of life insurance to buy, it’s important to consider the financial needs of your survivors.
For example, if you have young children, you’ll want to make sure they are taken care of financially if you die.
You’ll also want to think about whether your spouse will need to return to work or go back to school to get additional training.
Here are some other factors to consider when you’re buying life insurance:
Your age and health: The younger and healthier you are, the less expensive your life insurance policy will be.
The size of your family: If you have a large family, you’ll need more life insurance than if you have a smaller family.
Your financial obligations: If you have a mortgage or other debts, you’ll need enough life insurance to pay off those debts if you die.
Your income: If you are the primary breadwinner for your family, you’ll need more life insurance than if you are not.
Your lifestyle: If you have a more active lifestyle, you may need more life insurance than someone who has a more sedentary lifestyle.
Your job: If you have a dangerous job, you may need more life insurance than someone with a less dangerous job.
These are just some of the things you should consider when you’re buying life insurance or buying multiple life insurance policies. You may also want to speak with a financial advisor or a life insurance agent to get additional guidance.
Where Can I Learn More about Life Insurance?
If you’re thinking of diversifying your life insurance options or buying an additional life coverage policy, remember the tips we’ve covered in this article and make sure to shop around before settling on a policy or life insurance company.
If you’d like to learn more about permanent and term life insurance, or have questions about coverage, costs, and enrollment, visit our life insurance hub to read our latest articles.
Need help finding a life insurance plan to add to your current coverage? Reach out to one of our expert life insurance agents at 1-888-912-2132 or help@policyscout.com to find the best deals and answers to your questions.