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Can You Have More Than One Life Insurance Policy?

happy dad who has protected his family with multiple life insurance policies

Can you have multiple life insurance policies? You’d be surprised how many clients ask me this question!

Let’s face it, way too many people go without ANY life insurance coverage at all!

So, if you have the foresight to buy one policy I commend you! But there’s more to this story.

I mean come on! There has to be some kind of law that prohibits people from buying multiple life insurance policies…right?

Can You Have Multiple Life Insurance Policies?

happy dad who has protected his family with multiple life insurance policiesWhat if I told you that two life insurance policies for one person are perfectly legal!

In fact, owning multiple life insurance policies may be advised in some circumstances.

Yep! I myself own three…and if you think that’s a lot, Doug Andrews, a famous life insurance agent, claimed to own 13 at a seminar I attended! He literally has millions of dollars of coverage, just in case the unspeakable happens.

Hmmm  – what’s the deal, Chris? It sounds like you’re just trying to sell us a lot of life insurance policies! More policies = more money for you! Hold yer horses, partner!

While I can understand your hesitation. It’s not justified! But wait ’til I share these insider tips with you! They’re going to open your eyes to a world of possibilities!

You can own separate policies from different carriers or even more than one policy from the same carrier.

Do I Qualify For More Than One Life Insurance Policy?

Life insurance companies DO allow you to purchase multiple life insurance policies – BUT the coverage MUST be justified!

That means if you’re making $45,000.00 per year and don’t have kids, you can’t go hog wild and buy millions of dollars of coverage.

You’ll raise red flags. It’s just simply not permitted.

Life insurance is meant to protect your dependents from loss of income and debts when you die.

So a more important question than, “can you have multiple life insurance policies?” is DO YOU NEED multiple life insurance policies…

Top 4 Reasons To Have Multiple Life Insurance Policies

I’m gonna give 4 solid reasons you SHOULD have multiple life insurance policies:

1. Laddering Policies to Save Money

Multiple Life Insurance PoliciesIf you’re looking to save a boatload of cash this may be the option for you!

I love this life insurance tip because it consistently saves my clients thousands of dollars!

This is my BEST answer to the question “why should you have multiple life insurance policies?”.

The key to affordable and adequate life insurance coverage is in the PLANNING. Sadly most people speak to an agent with no idea of what their REALISTIC needs are. This is a HUGE mistake.

First of all, 9 times of out 10 people need far more life insurance than they ever imagined. Once you factor in debts, mortgages, loss of income and a funeral –  that $250K in coverage that SEEMED like a windfall has now become a pittance.

This is where the question “can you own multiple life insurance policies?” gets really interesting!

Example of Laddering Policies

So let’s say a 35 year old woman in good health comes into my office looking for $1 million in coverage for 30 years. She just got married and wants to have a couple of kids.

I LOVE this. First of all, this woman is a superhero in my opinion. She doesn’t even have kids, yet she is thinking down the line about their well-being.

She knows the importance of caring for them financially and wants to make sure her ducks are in order BEFORE she pulls the trigger. Kudos to her 🙂

So, what can Huntley Wealth do? The first option is the most obvious.

I can run quotes for $1 Million in coverage for 30 years. Today this would cost her about $785.00 per year with Protective, one of our preferred insurance companies.

Her single policy total cost for 30 years: $23,550.00 

That is if she qualifies for a preferred rating. 

We can do better. This lady is SMART. She and her husband have a plan to pay down their mortgage and debt ASAP.

This is where laddering comes in. We’re going to get her three policies:

  1. $200,000 for 30 years –  $225.00 per year
  2. $300,000 for 20 years – $200.00 per year
  3. $500,000 for 10 years – $180.00 per year

Laddering total for 30 years: $12,550.00

SAVINGS: $11,000.00!!

The math is simple. My client is financially savvy. As her debts and obligations are reduced so is her need for life insurance.

Her policies drop off as her needs change. Which means she won’t be overinsured OR pay unneeded premiums.

Pretty cool huh? It’s a simple and effective way to save lots of dough.

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2. Managing Risk: Diversification of Insurance Providers

There are no guarantees in life people! That holds true for EVERYTHING – including life insurance companies (although the risk is minimal).

I think a lot of people got spooked when Genworth exited the playing field. It’s not a common occurrence, but there’s always a chance that the life insurance company you select will go under.

Don’t worry, there are protections in place to make sure you aren’t left out in the cold…

BUT it’s a point of concern for some. So, spread the wealth.

Have More Than 1 Policy From More Than 1 Company

This is another interesting answer to the question “can you have multiple life insurance policies?”.

Instead of relying on ONE life insurance company to fulfill your needs, you may opt to spread the wealth.

I have a few clients who chose this route.

One gentleman has $1 million in laddered coverage with Banner and added on an extra $500K with Protective.

It gives him peace of mind, that something will be available to his family if one of these companies doesn’t come through.

3. Supplement Term Coverage With Permanent Life Insurance

Usually, when I recommend multiple life insurance policies, it’s a combination of permanent insurance with some type of term product.

Term life insurance is typically put in place to cover specific periods of time. For most families coverage is heaviest when children are under the age of 18 and mortgages are a burden.

The next step is college education for the kids and finally, your concerns will be limited to final expenses and inheritance.

Cover Final Expenses With A Second Policy

Let’s say you want to leave a small amount, $50,000 – $100,000, to your spouse or children…no matter what.

This money will be used to cover final expenses funeral costs and may even give your beneficiaries a little bit of extra cash. To achieve this goal I use permanent insurance, such as Guaranteed Universal Life.

Why? Because if you outlive your term insurance, and haven’t considered these matters, your premiums will be costly. Especially if you opt to convert to permanent insurance at the last minute!

I push my clients to plan in advance, to qualify for the best possible rate. So when your term policy drops off you don’t have to worry about these matters.

Want to know the problem with regular “universal life”?

If the cash value decreases too low, your policy can lapse and you can lose all your money.

That’s why we only sell GUARANTEED UNIVERSAL LIFE. It offers lifetime guaranteed level premiums, and as long as you pay your premiums, your policy can’t cancel.  It works just like term, but for life!

4. Buy More Life Insurance As You Can Afford It!

When a young person is just starting out, they may be at the lowest pay scale of their career. This might preclude them from affording the coverage they ultimately need.

I have many clients that buy what they can afford, and then, 2 or 3 or 5 years down the road, they add another policy or two.

This is a form of laddering – with a budgetary twist!

Frankly, ANY life insurance is better than NONE!

SO even if you are on a tight budget, buy what you can afford now, and then, in a couple of years, add another policy…

Another GREAT reason to consider purchasing multiple life insurance policies.

How Much Coverage Do You Need?

One guideline about how much life insurance you need is to calculate 10 times your yearly income.

But Wilson cautions against such generalities. “I stay away from rules of thumb,” he says. “There is a lot of information that has to be taken into account like your income, your debt, any businesses, the number of children, if there’s credit card debt, mortgages.” How Much Life Insurance Do You Need If Any? CNN 

This is THE most important question you need to ask yourself.

Far too many people are underinsured and your answer will determine whether you should take out multiple life insurance policies!

A little financial planning goes a long way, my friends!

This post on How Much Life Insurance You Need will give you an idea of how much coverage you should have.

The next step is to decide when you need coverage the most.

This is where planning with multiple life insurance policies comes in.

The answer will be different for a family with very young children than it will be for a couple in their 40’s with kids heading out the door.

Most of my clients are surprised by how much life insurance they actually need. The numbers creep up fast!

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FAQs

Is it legal to own multiple life insurance policies?

It is perfectly legal to have multiple life insurance policies. You simply have to be able to justify the amount of coverage you request.

​Can I apply for multiple life insurance policies at the same time?

Yes, you can apply for multiple life insurance policies simultaneously. In fact, I often recommend this for my clients who have special health conditions. By applying for multiple life insurance policies, we are able to find the most affordable option quickly.

Can you claim multiple life insurance policies?

The answer to can you claim more than one life insurance policy is a resounding YES! Your beneficiaries needn’t worry about multiple life insurance claims. As long as the claim is valid the life insurance company will honor it.

So, Can You Have Multiple Life Insurance Policies?

YES! Multiple life insurance policies may be the answer to keeping premiums low while providing maximum coverage during the periods you need it the most.

Whether you want to defray your risk or provide final expense life insurance, Huntley Wealth can help.

We have access to dozens of life insurance companies and our knowledgable agents will walk you through the underwriting guidelines to find the most affordable plan for your life insurance needs. 

Whether you’re looking for term, permanent or a combination of both life insurance options, we’ll get the best possible deal for YOUR circumstances.

This includes multiple life insurance policies!

*While we make every effort to keep our site updated, please be aware that "timely" information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Huntley Wealth & Insurance Services and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser.

About Chris Huntley

Chris Huntley is a nationally recognized expert on insurance. Over the past 10 years, Chris has helped thousands of individuals find the right insurance solutions through his private practice and his publications. He is a proud husband and father to three adorable girls.

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