Devon Delfino

LIFE INSURANCE Advertiser Disclosure Can you have more than one life insurance policy? Devon Delfino and Jennifer Lobb BLUEPRINT Published 12:00 a.m. ET Aug. 30, 2023 Editorial Note: Blueprint may earn a commission from affiliate partner links featured here on our site. This commission does not influence our editors' opinions or evaluations. Please view our full advertiser disclosure policy. Monkeybusinessimages, Getty Images Key points You can have more than one life insurance policy, but how many may depend on the total coverage amount. Having more than one life insurance policy can help you meet changing coverage needs, like the birth of a child or taking out a mortgage. Term life insurance can help you provide coverage for a specific time or need, such as raising children, while permanent life insurance can provide coverage for a lifetime. Maybe you recently took out a mortgage or had another child and don’t feel your existing life insurance policy provides enough coverage. Or perhaps you’re currently taking advantage of a supplemental life insurance policy through work but would also like to purchase a life insurance policy on your own. If you’re thinking about doubling (or tripling) down on your life insurance coverage, here’s what you should know. AGE 35 How much does life insurance cost? COVERAGE AMOUNT $ 500k GENDER Female ZIP CODE 55438 LENGTH OF COVERAGE MONTHLY ESTIMATES FOR Best health $ 18 Good health $ 22 Average health $ 33 20 Year COMPARE QUOTES from multiple carriers at Quotacy.com Can you have multiple life insurance policies? Yes, you can have multiple life insurance policies. “It’s absolutely possible to have more than one [life insurance] policy. Many people have multiple policies and they can be in place for different reasons,” said Ian Freeman, a wealth management advisor at The Freeman Group. However, when you apply for a new policy, you’ll often need to disclose other life insurance coverage you may have. And while there is no legal limit to the number of life insurance policies you can buy, you may face coverage limits set by the insurer. Also referred to as your “insurability limit” this number is based on factors such as your age and income and takes into account your total coverage across all policies. “The maximum amount you can obtain depends on the circumstances, but in almost all cases there must be an ‘insurable interest,’” explained Freeman. “For many insurers, starting guidelines might be a multiple of your income — as an example, up to 20 times your income — or an analysis of your needs based on net worth and potential growth, family circumstances, and business obligations.” Why you may want more than one life insurance policy Even if you went with the best life insurance policy and coverage amount initially, you may find that your existing coverage no longer suits your needs. There are many reasons to consider purchasing additional life insurance, including: Familial changes, like having a child or becoming the primary wage earner. Increasing your financial obligations, such as taking out a mortgage. Opening a business, in which case a life insurance policy may be part of a buy/sell or succession planning. Laddering term life insurance policies to meet coverage needs at various points in your life. Leveraging life insurance as part of a long-term care plan. Purchasing different types of coverage, such as a whole life insurance policy to provide lifelong coverage and a term life insurance policy for coverage of a mortgage. Layering a personal life insurance policy with a supplemental life insurance policy provided through an employer or organization. In general, lifestyle changes, milestones and other events that affect the financial needs of you and/or your family can trigger the need to purchase additional coverage. “For instance, a person might buy a life insurance policy after she gets married but before she has any children,” said Sahang-Hee Hahn, head of strategy and planning at Haven Life. “In this case, she may only wish for basic coverage to help pay for short-term expenses. But, let’s say five years later that same person has two young children and a mortgage on her first home. Her financial situation is now quite different, and she may wish to layer or ‘ladder’ additional coverage to support her children’s future educational needs or pay off the mortgage.” Should you have more than one life insurance policy? It really depends on your goals and coverage needs. “One life insurance policy may be enough for you. A general rule of thumb is that you should have enough coverage to cover five to 10 times your salary. This amount allows your beneficiary to cover most of your debts and maintain their standard of living.” Sahang-Hee Hahn, Head of Strategy and Planning, Haven Life Other factors that can affect your total coverage needs are: Number of children or other financial dependents you have. The needs of your dependents, such as school tuition or child care. Debts, such as a mortgage payment. Estate or end-of-life planning. Business needs, if you’re the owner or co-owner of a business. If you purchased life insurance but experienced an event that changed the financial needs of you or your family, it’s worth considering the merits of buying another policy. To figure out if you need an additional life insurance policy, consider factors such as: Any existing life insurance policies you have, including coverage limits and policy features. Your current and projected income, to determine how much coverage you can afford and ensure your policy (or policies) will provide adequate salary replacement. Coverage types or policy features you want, such as a long-term care rider or a cash value component. A second (or third) life insurance policy may not always make sense, however. For instance, purchasing another life insurance policy will require you to cover another premium. Before you purchase a policy, make sure it fits into your budget. If you aren’t sure whether or not an additional policy makes sense, speak with a financial advisor who can evaluate your entire financial picture and determine whether another life insurance policy is best or whether the required premium payments would be better spent elsewhere. Types of life insurance policies and how they work There are two primary types of life insurance: Term and permanent. Term life insurance Term life insurance offers coverage for a set amount of time, or a term, such as 10, 20 or 30 years. During that period, your rates and coverage are locked in, and if you die, your beneficiary will receive a death benefit. At the end of the policy term, coverage often ends, though you may have the option to renew your policy (often at a much higher rate each year you renew) or convert it to a permanent life insurance policy. If the policy expires, your beneficiaries will not receive a death benefit. Term life insurance policies can be useful to ensure your loved ones are covered during a specific time, such as until children reach adulthood or a mortgage is paid off. These policies are generally cheaper and less complex than permanent life insurance policies. Permanent life insurance Permanent life insurance generally lasts a lifetime, though some products may secure coverage to an advanced age, such as 100 or 105. There are numerous types of permanent life insurance, including whole life, universal life and indexed universal life insurance. Permanent life insurance policies usually include a cash value component that can build over time. You can borrow against or withdraw from the cash value account, though doing so may affect your death benefit. Life insurance ratings Best life insurance companies Best cheap life insurance companies Best term life insurance companies Best whole life insurance companies Best senior life insurance companies Best no-exam life insurance companies Frequently asked questions (FAQs) What is the maximum amount of life insurance you can get? It’s common for life insurance companies to offer policies with up to $1 million or more in coverage, but the maximum amount of coverage you can get depends on numerous factors such as your: Age. Health. Type of life insurance policy you choose. Income. Insurer you choose. Eligibility will also depend on your insurability limit, or the maximum amount of coverage — including coverage from existing life insurance policies — an insurer will extend. Each insurer sets its own limit, but the maximum number is often based on a multiple of your income, such as 20 times, and your age. Can anyone get a million dollar life insurance policy? How many life insurance policies can you have? Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results. Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information. Devon Delfino BLUEPRINT Devon Delfino is a writer who’s covered personal finance—including everything from student loans to budgeting to saving for retirement and beyond—for the past six years. Her financial reporting has appeared in publications like the L.A. Times, U.S. News and World Report, Teen Vogue, Mashable, Insider, MarketWatch, CNBC and USA TODAY, among others. Jennifer Lobb BLUEPRINT Jennifer Lobb is deputy editor at USA TODAY Blueprint and is an experienced insurance and personal finance writer. Jennifer served as an insurance staff writer and editor at U.S. News and World Report and deputy editor of insurance at Forbes Advisor. She also spent several years covering finance and insurance for various financial