You can buy as many life insurance policies as you want, but reputable agents usually inquire about the protection you need. The need for additional life insurance may arise over time as your financial situation changes or you consider different needs for your family. Some people who have whole life insurance for permanent protection decide they want more life insurance at lower costs with a short-term life policy.
Goals for Multiple Life Insurance Policies
No legal limit exists on how many life insurance policies you can have, but companies might want to know your goals and financial situation, such as your income and assets. You can purchase two or several life insurance policies if you can afford the premiums. At certain periods of your life, you might not have the money to buy all the life insurance you want, especially when you first buy a policy.
Needs for More Protection
Adding another life insurance policy or increasing the amount of your coverage becomes wise as your income improves and you can afford your insurance needs. Over time you could have more children or more assets you want protected with a life insurance policy. You can have more than one policy through the same insurer or multiple companies. You might decide a term life policy helps in case you need to cover debts over the short term and also have a permanent or whole life policy to protect your beneficiaries with financial assistance after your death. Although the decision on the number of policies you want depends on you, trustworthy life insurance companies and agents do not want to sell you more insurance than you need, so they want to look at your current policy or policies.
Multiple Life Insurance Claims
Your application for additional life insurance could face delays or rejection as the underwriting process examines your current coverage. When you seek a higher amount for a death benefit, apply for more than one life insurance policy at the same time or seek more than one insurance policy during a short period of time, you might be asked to provide further information on the reasons for your request. Even though you can have multiple policies at different amounts, insurers consider your current circumstances and your financial condition to make sure the policies are affordable and meet your needs. Insurance companies may file your application with the Medical Information Bureau, a nonprofit membership group of insurance companies that operates a cooperative data exchange on behalf of its members. Insurance companies are allowed to access medical records from the MIB for life and other types of insurance to prevent insurance fraud, as well as cross-checking information you may have provided.
Immediate and Future Considerations
Examining what's best for you and your family makes it easier for you and the insurance company when you consider buying more than one policy. Immediate expenses and the long-term obligations your beneficiaries may face after your death play major roles in coverage. Final expenses include funeral and burial costs, which can amount to more than $10,000 or even more over time. Debts may include mortgages and other financing obligations your beneficiaries have to deal with. Also consider educational costs for your children, as well as income replacement for your spouse and family after your death. Sensible motives for multiple life insurance policies make the application process simpler.
- Term-Life-Online: How Many Life Insurance Policies Can You Have?
- Insure.com: Can a Person Buy Multiple Life Insurance Policies with a Single Insurer?
- Kiplinger: How Much Life Insurance Do You Need?
- LIMRA. "2020 Insurance Barometer Study Reveals a Significant Decline in Life Insurance Ownership Over the Past Decade." Accessed Sept. 15, 2020.
- Life Happens. "2019 Insurance Barometer Study: Nearly Half of Americans More Likely to Buy Simplified Underwritten Life Insurance." Accessed Sept. 15, 2020.
- Insurance Information Institute. "Facts + Statistics: Life insurance." Accessed Sept. 15, 2020.
Jerry Shaw writes for Spice Marketing and LinkBlaze Marketing. His articles have appeared in Gannett and American Media Inc. publications. He is the author of "The Complete Guide to Trust and Estate Management" from Atlantic Publishing.