Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona
You can have multiple policies as long as the total face amount or death benefit doesn't exceed the economic justification limit based on your finances. Some policy holders use life insurance for protection with term life insurance and cash value life insurance for tax advantaged income as a supplement to their retirement plan.
Agency Owner, The Thomas G Sheehan Agency, 27 Glen Road Sandy Hook, CT 06482
Sure, you can have two Life policies. The face amount in total will need to be justified by your own personal financial exposure of course, but many people carry multiple policies for differing reasons. Some may cover the exposure for a short term loan, others may have more permanent or longer term functions such as retrement protection or education funding. Still others can be to protect the financial interests of partners in a business.
Yes, you can have two life insurance policies if you are financially qualified to have that total amount of coverage. When you apply for a new policy, the insurance company will ask about your existing life insurance, and whether or not you plan to replace it. They are not asking this to disallow you to get a second (or third or fourth or fifth) policy. They are just checking to make sure that your income justifies the amount of life insurance you are getting, and also to prevent unscrupulous agents from taking advantage of you by having you replace valuable policies with inferior ones.
The simple answer is yes, you can have two or even more life insurance policies in force at the same time. The main restriction on the amount of life insurance you can have is how much you are worth. When you apply for any insurance policy, they will ask what other plans you have in force. If you are asking for too much insurance combined between all of your plans (this amount varies based on the company but is often 20-25 times your annual income), they may deny your request.
Certainly you may have two or even more life insurance policies in force. The main issue with an underwriter would be the total face amount has to be in line with your earnings, debt or net worth. In many cases a consumer should carrier multiple policies.
For example, if you need one million in term life over a 30 year span, you should break it down to your exact needs. Lets say you owe $300,000 for 20 years on a mortgage and your children will be out of college in 10 years. It may make since to have $200,000 in 10 year term for your children"s college and $300,000 in 20 year term for the mortgage and $500,000 in 30 year term for income replacement. This is still $1,000,000 in term but it expires when no longer needed and keeps premiums down to a minimum. I suggest consulting with an experienced independent broker to shop the right product mix for your unique situation.
Many people do - they have a policy through their workplace, and then a policy outside of work to ensure coverage that work didn't provide, or in the event that the employment ends. You may have more than one policy, but the insurance companies will put a limit on how much coverage you can apply for. If you would like more information, please hit the 'contact me' button, I'd be happy to help. Thanks for asking!
Yes, you can have two or more policies, as long as you qualify financially for the total amount of coverage.
Some mixed families take out two policies, rather than have their biological children and stepchildren have to split the same policy proceeds. Or, they take two policies so their divorced spouse has a different policy than their current spouse.
Those who own business policies may need to keep them separate from personal policies for tax reasons.
Sometimes having two policies is better than one, because the death benefit will be covering two completely different types of needs. E.g. You might want a small policy to cover your funeral expenses, which would necessitate some type of permanent insurance. But you might also want a larger policy to pay off your mortgage, and 10 year Term (which usually costs much less than Whole or Universal Life) may be a much more economical choice for that particular need.
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For example, if you need one million in term life over a 30 year span, you should break it down to your exact needs. Lets say you owe $300,000 for 20 years on a mortgage and your children will be out of college in 10 years. It may make since to have $200,000 in 10 year term for your children"s college and $300,000 in 20 year term for the mortgage and $500,000 in 30 year term for income replacement. This is still $1,000,000 in term but it expires when no longer needed and keeps premiums down to a minimum. I suggest consulting with an experienced independent broker to shop the right product mix for your unique situation.
Some mixed families take out two policies, rather than have their biological children and stepchildren have to split the same policy proceeds. Or, they take two policies so their divorced spouse has a different policy than their current spouse.
Those who own business policies may need to keep them separate from personal policies for tax reasons.
Sometimes having two policies is better than one, because the death benefit will be covering two completely different types of needs. E.g. You might want a small policy to cover your funeral expenses, which would necessitate some type of permanent insurance. But you might also want a larger policy to pay off your mortgage, and 10 year Term (which usually costs much less than Whole or Universal Life) may be a much more economical choice for that particular need.