How Many Life Insurance Policies Can You Have?
"Are You Wondering How Many Life Insurance Policies Can You Have?"
The answer may surprise you. Is it one, two, three or more?
Actually, there is no limit to the number of life insurance policies you own.
That’s right, you can have more than one life insurance policy.
How can this be? Well, your life insurance needs may increase over time and your responsibilities increase. So, you may want to buy another life insurance policy to provide added protection for your family.
Or, you may already own a permanent life insurance policy, but maybe you need a lot more life insurance at a lower price, so you might want to purchase a term life insurance policy to meet your needs.
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Overview of Life Insurance Policies and Amount of Coverage
A life insurance company might question your motives for taking out too many life insurance policies, especially if your current financial situation does not back the overall cost of your insurance.
Basically, the issue for insurance carriers isn’t how many policies you own, but rather the total amount of life insurance coverage you have compared to your income, assets and financial responsibilities.
As long as you can pay the premium, there is no limit to how many life insurance policies you may own.
When purchasing more than one policy, remember to keep a master copy of all the information in a safe place (safety deposit box or fireproof safe) so when you pass away your family will know exactly where to find the insurance policies.
Simply put, there is no legal limit to how many life insurance policies a person can own, nor how many of each type. It appears current Legislation does not exist that restricts the number of life insurance products a person can buy.
Owning More Than One Life Insurance Policy
The ability for a person to own more than one life insurance policy allows people with limited funds to slowly buy additional life insurance policies as their available income increases over time.
At first you may not have the money to buy the amount of life insurance you really need. So, over time, you can increase your coverage as your income increases, to meet your actual need for life insurance.
Buying More Than One Life Insurance Policy at a Time
Currently there appear to be no laws prohibiting a person from buying multiple life insurance policies, but you may run into some difficulties in obtaining more than one life insurance policy at the same time.
Life insurance applicant information is submitted to the Medical Information Bureau (MIB), and all insurance companies research a new customer's files prior to issuing a new policy for life insurance.
Someone trying to buy more than one life insurance policy at the same time, or multiple life insurance policies within a short time span, may raise concerns within the insurer’s underwriting department which may lead to delays or even rejection of your application for coverage.
Amount of Life Insurance You Can Buy
I addition, there currently appears to be no laws restricting how high of a death benefit an applicant for life insurance can buy.
Placing a value on a person's life is a matter of opinion, and there are several accepted methods used within the life insurance industry to determine what is considered an appropriate level of coverage.
Most life insurance companies have their own policies regarding limits on death benefits for life insurance.
A person who applies for a life insurance policy with a death benefit higher than what the insurance company deems normal and ordinary may have to provide further documentation or explanation for the request. The idea is that the insurer does not want you to be over-insured. Insurers consider your annual income and life insurance needs when approving the amount of life insurance they may offer you.
Why Buy More Than One Life Insurance Policy?
There are many reasons that may arise for adding an additional life insurance policy based on increased needs.
For example, the birth of a new child creates a significant financial liability for parents. Or, you may buy a new home with a larger mortgage you want protected by your life insurance policy.
Buying Term and Whole Life Insurance?
Many people may choose to buy a term life insurance policy and a separate whole (permanent) life insurance policy to meet their needs.
Term life insurance can give you the temporary life insurance you need for up to 30 years at very low rates. While permanent life insurance can provide the lifetime protection you need to provide for your final expenses.
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