Can You Have More Than One Life Insurance Policy?

You want life insurance coverage in case your demise would harm anybody financially. For many individuals, one coverage is sufficient.


However for some, two or extra make sense. Your wants ought to drive the quantity and sort of insurance policies you purchase.


What number of can do you purchase?

You’ll be able to personal a number of insurance policies from totally different corporations. However, if you apply, insurers will ask about present protection to ensure the quantity you need is affordable, says Brian Ashe, government vice chairman of Life Occurs, an academic nonprofit supported by insurers.

You should buy lots without elevating eyebrows. Insurers sometimes will ask for justification if the entire protection would exceed 20 to 30 occasions your revenue, he says.

A number of time period life insurance policies

The most typical motive to purchase protection is to exchange revenue in case a breadwinner dies prematurely. The answer: time period life insurance coverage, which covers you for a sure interval, equivalent to 10, 20 or 30 years. Ideally, by the point the time period expires, you do not want life insurance coverage: Money owed are paid, the children are grown up.

As a substitute of shopping for one massive coverage, you may purchase a number of insurance policies of various lengths and quantities to match wants over time. For instance, moderately than a 30-year $1 million coverage, you may purchase three insurance policies:

 

  • 10-year, $500,000
  • 20-year, $300,000
  • 30-year, $200,000

 

This “laddering” technique can lower your expenses, says Dennis Rupp, director of insurance coverage wholesaling at TIAA, a monetary company supplier. And it will possibly work if protection wants to diminish and you may precisely predict them. “However spoiler alert: Life is de facto messy,” Rupp says.

Should you resolve to purchase only one coverage and discover later you do not want as a lot of life insurance coverage, most insurers will allow you to lower the protection and pay much less, Ashe says.

Totally different objectives, totally different insurance policies

You could have different causes to purchase protection, moreover changing revenue. Some examples:

 

  • Small-business proprietor wants: You could want a time period coverage to handle the household and one other to cowl enterprise loans or fund a buy-sell settlement.
  • Lengthy-term care: A hybrid life insurance coverage coverage can be utilized to pay for long-term care for those who want it. Should you do not max out the advantages for care, it pays out at demise. You may personal conventional life insurance coverage to handle monetary dependents and hybrid coverage to cowl long-term care.
  • Property planning: If you wish to depart life insurance coverage cash to somebody irrespective of if you die, you will want an everlasting coverage, equivalent to complete life. Licensed monetary planner Chris Chen of Perception Monetary Strategists in Waltham, Massachusetts, advises shopping for time period life for finite wants – the interval when others rely in your revenue – and selecting an everlasting coverage for property planning.

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Barbara Marquand is an author at NerdWallet. E-mail: [email protected] Twitter: @barbaramarquand.

The article Can You Have Extra Than One Life Insurance coverage Coverage? Initially appeared on NerdWallet.

The views and opinions expressed herein are the views and opinions of the writer and don’t essentially replicate these of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the writer and don’t essentially replicate these of Nasdaq, Inc.