Yes, you can have more than one life insurance policy without any legal issues but you need to disclose it.
Life insurance is a really good plan of taking care of any financial constraints on your family in case of your death. And not only is life insurance important when there is death.
There are so many things you can easily cover or deal with when you have a life insurance policy. This is why so many people are very keen on taking a life cover. The benefits are enormous. To some people is also an investment opportunity.
With the main benefits attached to life covers, you may be wondering if it is possible to have more than one.
Can You Have More than One Policy?
The answer is Yes!
You can comfortably get more than one life cover. It is a common thing that many people do. Although you may not know this from your experience, insurance companies have reported that there are very many people who take more than one life cover policy.
So, if you were curious about taking more than one cover, you have your answer.
In this article, you will find more information related to life protection and having more than one protection.
Owning Multiple Life insurance Policies
The first thing that you have to remember is that it is legal to hold and claim various life covers. In the event you have multiple policies, your beneficiaries will also be in a position to claim death benefits for all of them.
You will also be free to collect other benefits related to the policies at various times of the coverage. Irrespective of the company you are using for each case or the type of policy you have in each case, they all remain independent.
This means that the event of a claim, one policy will not affect the other one. As long as you are paying the premiums for each policy, the contract signed is binding.
Conditions to Meet for Multiple Coverage
As much as multiple life insurance policies are legal, there are a number of conditions that insurance companies demand from you to qualify. This is to ensure that people are not going to extreme levels.
Disclosure of Material Facts
Disclosing about your other policies is an important factor when you are seeking to have multiple life protection covers. It is crucial since it enables the company to know about your existing policies and how better to handle you at that moment.
It is the right way for them to know how to help you find the best policy in line with your goals. As a result, in the case where you do not present facts about your other covers, there are high chances of misrepresentation.
At the same time, this means that if you are misrepresented, there are facts that would not be laid out clearly, which may lead to rejection.
Sum of Assured Not to Exceed Human Life Value
Every insurer will access various factors to make sure that you are eligible for having multiple life covers. However, one condition is that the combination of all the policies should not amount to benefits that exceed your human life value.
Human life value is always estimated through financial underwriting.
To make this simple, the majority of insurers will allow you to take as many policies as possible. However, the total coverage should not exceed 15 to 30 times your income.
Meet Requirements for the Current Policy
When you are applying for life protection, you have to understand that conditions for getting approved for that particular cover still apply. Whether it is a term policy and you already have a whole life cover, you must meet the requirements from the insurer.
Other than meeting all other conditions, you will be evaluated for the cover you are interested in at the present moment.
Reasons for Multiple Life Insurance Policies
Multiple life covers are such a good idea if you have the ability. Different people have different reasons why they would be interested in taking multiple life policies.
However, there are many common reasons which include the following.
Managing Risk
Many people take multiple policies and from many companies to manage risks. The main goal at this point is to diversify the insurers.
It may feel risky for some people to entrust the benefits to one company. Since life insurance is a long-term contract, many people feel like there is something that may happen within those many years.
As a result, they want to increase their chances of receiving benefits once they die by having many insurers. It is also a necessary move to take.
Saving Money Through Laddering Policies
To be clear, this is one of the most common reasons why people decide to take multiple covers. This saves money on how much premiums they are going to pay overall.
By laddering policies, it is taking several contracts that are adding up similar to taking whole life insurance. For example, you are in your 40’s, and you want a term life cover of 50 years.
You can easily get laddering policies to save on premiums. You can easily take three different policies of 50 years, 30 years, and 20 years. As a result, the overall total amount of premiums you will have paid will be lower, and you will still receive your benefits.
Need for Better Benefits
Who doesn’t want to get more benefits from life insurance policies? The bigger the profits, the better. As a result, if you are in a position, why not take multiple policies.
For many people, they do their budgets and realize that they are in a position to take more than one policy and leave a huge amount of money for their family.
So, if you look at your finances and you realize it is possible to take care of premiums from multiple life covers, go ahead and take it. It is an excellent step to offering your beneficiaries financial security once you are deceased.
Small-Business Owners
Many small-business owners take multiple term policies. The main goal, in this case, is to distribute benefits. One of the policies can be used to take care of the family in case of any emergencies.
Another cover is used to take care of business loans. It can also be used for a buy-sell agreement for the business.
How to Apply for Multiple Policies
Taking multiple policies does not have one specific formula. As a result, you can choose one plan after the other, at whichever time you feel comfortable for you. Companies do not care when you take any of the policies as long as you are meeting their requirements.
However, when you are taking multiple policies at the same time, it is a whole different case.
You have to be smart about the whole application process if you want to find it easy and reduce the chances of a lot of struggle. Do you want to spend time running from one company to the other? The procedures are long for that,
As a result, it is always a good idea to work with an agent who represents all the companies that you are interested in. It is a genius move, and here is why.
You get a chance to use one medical exam for all the companies that you are applying to. Since it is the agent in charge of the medical exam, you do not have to take one every time you approach a company.
You will be able to use the same records for all the companies. All insurers will require you to present the necessary documents and records for approval to insurance. If you are working with different agents, it means that you have to get all your records processed at every instance. That can be tedious.
Do you want to make the pre-qualification correct and easy? Then you better get an agency or agent who is representing all your companies of interest or most of them.
Since the agent is neutral, the pre-qualification process becomes easy. At the same time, you increase your chances of getting better rates from all the companies.
Can You Use Different Companies?
The answer is yes.
When you decide that you want to have multiple life policies, you are not restricted to who to take the policies from.
It is upon you to decide which company works with and for which policy. You can choose to have five different policies from 5 different companies.
All that matters is that you have to meet the requirements of each company.
At the same time, you can also take multiple life cover policies from the same insurance companies. In this case, as well, you are required to meet all the conditions of each policy irrespective of working with the same company.
Get the Best Deal on Multiple Life Insurance Policies
If you want to get the best deal for life insurance, then you can use multiple life policies as a good idea. However, you have to be very careful in terms of the move that you make to ensure that you are decreasing the cost as much as possible.
When Dealing with the Same Company
It does not mean that taking multiple life covers; you have to choose from different companies. You can also take it from the same company.
When you decide to take all your life policies from the same company, then you have to make sure that you take different policies.
Taking the same type of policies from the same company, it is not smart. Is it?
However, when you take different types of policies, there are high chances of benefits. What this means is that the plans will be able to give you better benefits at various times within their term.
At the same time, you have higher chances of reducing the amount of premiums you are paying for the overall policies.
Consider breaking on policy into several parts. When you are taking a term life protection, and you are interested in multiple options, dividing the same contract into multiple small ones is a smart move to work with.
When you calculate the over premiums over time for multiple units of a term contract, you will realize it is lower than paying for one long term.
There are also chances that a company will give you discounts based on the fact that you are taking several policies from them at the same time.
Dealing with Several Companies
When you are taking different policies from different companies, the chances of getting the best deals are very low. This is because every insurer is going to treat you differently and as a different case.
However, use off the same agency or agent can save the day.
Agents have a significant impact on the reception you get from a company. As a result, when you use the same agent for all the companies you are working with, you increase the chances of getting better deals.
An agent will understand your condition and make it easy to negotiate the best deal for all the companies that you will be working with at that particular time.
Factors to Consider First
As much as having more than one life insurance policy is a good idea, you have to be careful when choosing the policies. You have to consider several factors and evaluate them clearly before making your decision.
Evaluate the Benefits
You cannot take a life cover policy without understanding how it is going to help you. Evaluating the kind of benefits that you will get upon taking more than one plan is an important move.
You have to make sure that the benefits you get are in line with your goals. Always make sure that you consult an insurance agent to get advice on how each policy will help you.
The Policy Should Meet Your Goals
When you are going for more than one policy, you need to have goals. You should have targets of what you would like to achieve by taking more than one policy.
Some people take such policies as investment options. Always make sure that you have your goals set right. If you are looking at the move as a means of protecting your business, then you have to know how that will happen before getting the policies.
Select the Right Policies
Setting goals and deciding to take more than one life insurance policy is one thing, but finding policies that will help you meet your goals is another challenge.
Always make sure that you compare the benefits of a particular type of insurance policy with the goals you have in mind to ensure you will benefit.
In case you have any doubts, consult an insurance advisor to guide you on which life protection policies will enable you to achieve both your long-term and short-term goals.
Finances are Vital
Did you know that you can take multiple life policies and end up losing in most of them?
In such a case, it means that you will have to spend so much money paying the premiums and end up losing benefits for all the policies.
Lapse is the worst thing that can happen to you in case you take multiple life covers. The challenge of dealing with the lapse of multiple life protection contracts can be a difficult financial burden for you to carry.
As a result, always make sure that you evaluate your financial ability to know if you will be able to pay the premiums for all the policies you are interested in.
Ensure that you also consider the future of your source income to know how well you can take care of the premiums for a long time.
Type of Companies
Not all life insurance companies you should consider suitable for your needs. At the same time, not all life insurance companies are ideal for your multiple cover needs.
You do not want to take multiple life cover policies from several companies that will make your life stressful. As a result, choose wisely.
Make sure that you take as much time as you need when shopping for several companies. You can work with an insurance advisor to evaluate the rates and conditions of various companies to arrive at the best ones for you.
Are There Challenges of Multiple Policies?
Yes!
The reality is that there challenges that come with more than one policy, and you need to consider before making a move.
- High burden of premiums: This is the most common challenge that many people face when taking more than one policy. As a result, it lender you unable to pay all the premiums hence leading to lapse.
- Long procedures for applying: Having to walk into every company, answering many questions, filling forms, and going through evaluations can be challenging.
The Bottom Line
Taking more than one life insurance policy is legal. There are also many benefits to doing it. However, take your time to consider all factors and research before you go ahead with the plan.
