How Many Life Insurance Policies Can I Have?
There is no set limit to how many life insurance policies you can purchase. You can buy multiple policies from different insurance companies, but insurers may start asking questions if your coverage reaches a point that greatly exceeds your income.
Can It Cause Problems to Buy More Than One Life Insurance Policy?
You can have more than one life insurance policy, and there is no rule against applying with more than one insurer at the same time. However, doing so can complicate the application process.
When you submit applications, life insurance companies share the information with each other. The purpose is to avoid insuring you beyond your limits of insurability – the amount of coverage you can reasonably purchase based on your income, debts, and other financial factors. When you apply to more than one company at the same time, you may be denied by all of them, or your applications may be delayed. You may be required to undergo more than one medical exam.
Our experienced agent can help you find the most affordable and best life insurance. If you want to purchase more than one policy, we can help you split the coverage without slowing down the process or raising any red flags.
Why Buy More Than One Life Insurance Policy?
There are several reasons why you might want to have more than one life insurance policy:
- Group life insurance is not enough: If your employer offers group life insurance, it might make sense to opt in, but the policy may not provide as much coverage as you need. In this case, you may want to purchase additional life insurance.
- Major life changes: If you get married, have a child, start a business, or buy a house, you may need to increase the amount of life insurance coverage you have. You may choose to buy an additional policy, rather than increasing the limits of your current policy.
- Long-term financial planning: Life insurance can play a major role in a financial plan. Many people use the ladder strategy, purchasing term life insurance policies with different terms, such as 10, 20, and 30 years, in decreasing coverage amounts, that expire one by one as expenses decrease and debts get paid down. Expenses such as childcare and mortgage payments are likely to be highest during the first 10 years, and that is when you have the highest amount of coverage.
- Risk mitigation: Some people don’t like the idea of relying on one insurer alone for their families’ future financial protection. Buying multiple life insurance policies puts your “eggs in more than one basket” to minimize the risk in case a company goes out of business.
When you work with our agent, we can discuss alternatives to buying multiple life insurance policies, such as increasing your coverage amount or adding riders (additional benefits) to your policy. If you want to buy more than one policy, we can help you acquire the right coverage for the lowest rates.Filed Under: Life Insurance | Tagged With: Group Life Insurance, Life Insurance