Leaving a larger amount of beneficiaries can provide a solution if you are worried about their financial future, especially if you are not there to help them. Can you buy multiple life insurance policies?
Can I have many life insurance policies?
Yes, having many life insurance policies is legal and common. Life insurance is flexible, and many people invest in policies of different lengths and amounts of insurance depending on their needs. This strategy is known as the “ladder” and is a good way to layered coverage so that it decreases with financial liabilities.
How to ladder life insurance policies
Let’s say you are a young parent who just bought a 30-year mortgage. You can take out a 30-year life insurance policy to match your mortgage and a 20-year life insurance policy when they enter the labor market and start earning their own money. With this strategy, the goal is to have only as much coverage as you need for this time in your life.
Why many life insurance policies?
A common reason why someone may choose to take out many life insurance policies is because they cover various financial obligations.
They may include:
- Mortgage
- Spouse
- Children
- Tuition
- Funeral costs
How many life insurance policies can you have?
The number of life insurance policies that one person can have is not limited, but if you decide to buy multiple life insurance policies you may be asked to justify the amount of insurance you want.
Multiple life insurance policies
The most common reason for purchasing insurance is to exchange income in the event of the premature death of the breadwinner. Solution: timely life insurance that covers you for a certain period of time, for example 10, 20 or 30 years. Ideally, until the deadline, you don’t need life insurance: debts are paid off, children grow up.
Instead of buying one large policy, you can buy many policies of varying lengths and amounts over time to suit your needs. For example, instead of a 30-year US $ 1 million policy, you can buy three policies:
- 10 years, 500,000 $
- 20 years, 300,000 $
- 30 years, USD 200,000
What are the benefits of having many insurance policies?
First, it provides protection against the rejection of the claim. Although full disclosure is usually all you need to make sure your claim is accepted, everything may go wrong. The last thing you would like is for your family not to receive financial support during your absence. You can spread the risk by taking more than one policy from different insurers with different satisfaction rates.
Secondly, it will help you in planning protection based on a milestone. You insure your life based on dependents. For important life events, such as marriage, the birth of children, their education or buying a home, you may want to check and / or change your policy. Let’s say you need to re-issue a 30-lakh loan in 20 years. Instead of taking 1 crore for 30 years, why not take 30 lakh for 20 years and 70 lakh for 20 years?
