Paige Cerulli Last Updated On: May 13, 2024

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Can You Have More Than One Life Insurance Policy?

Can You Have More Than One Life Insurance Policy

Life insurance gives you the peace of mind of knowing that your loved ones will receive financial support after your death. It can help your family cover funeral costs, mortgage payments, and other expenses. But in some situations, a single life insurance policy might not be the right fit. Can you have multiple life insurance policies? And when does buying multiple life insurance policies make sense?

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Can You Have More Than One Life Insurance Policy?

Yes, you can have multiple life insurance policies, and you can purchase those policies from the same or different insurance providers.   There are several situations where buying multiple life insurance policies makes sense:
  • To supplement the group life insurance policy that your employer offers
  • To support various financial goals, like supplementing your income or planning for retirement
  • To establish coverage that will pay for your changing expenses, like a mortgage and dependent childcare costs, throughout your life
  • To add coverage for a changing financial situation, such as if you have a child or start a business
  • To add on coverage to help cover the costs of long-term care later in life

How Many Life Insurance Policies Can You Have?

There isn’t any legal cap on the number of life insurance policies that you can have at once. However, life insurance providers will place a limit on the total value of the combined insurance policies. That value is often 20 to 30 times your annual income, but as you age, the maximum value of the policies you can purchase decreases. That’s one of the reasons why it makes sense to buy life insurance earlier on, since the cap on your coverage will be higher.

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How Does Buying Multiple Life Insurance Policies Work?

Many people buy multiple life insurance policies using a strategy called laddering. By simultaneously buying term life insurance policies, you can maximize your coverage early on in life, and then gradually decrease that coverage. When you buy term life insurance, you can choose your amount of coverage and your term length. You might choose to buy three policies:
  • A 10-year, $400,000 policy
  • A 20-year, $300,000 policy
  • A 30-year, $200,000 policy
If you were to die in the first 10 years, all three policies would be in effect, meaning your beneficiaries would receive a $900,000 benefit. If you die in the second decade, the $400,000 will have expired, but your beneficiaries would receive $500,000 from the remaining two policies. Some of your children might be financially independent by that point, but the benefit would still offer financial support. Let’s say that you died during the third decade. Your beneficiaries would receive a $200,000 benefit. Since your children would likely be fully financially independent, they would need less financial support after your loss, so the single life insurance policy would be suitable.

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How to Choose the Right Life Insurance for Your Needs

The best way to find the right life insurance is to shop around and compare quotes. You can get free, personalized life insurance quotes today to start comparing your options.  

Paige Cerulli Paige Cerulli is a freelance content writer and journalist who specializes in personal finance topics. She graduated from Westfield State University and brings more than a decade of professional writing experience to the ConsumerCoverage team. Paige’s work has appeared in outlets including USA Today, Business Insider, and more.


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