The most common question that people ask when it comes to owning multiple life insurance policies is whether or not it’s legal. I’m happy to tell you that not only is having multiple different life insurance policies perfectly legal, if often times makes a lot of financial sense.
Life insurance is built for protection. It can protect your loved ones from financial turmoil in the unfortunate event that you were to die early. While the topic of life insurance can get quite confusing if you dive into it deeply, its overall premise is actually quite simple.
There are two basic types of life insurance: term life and whole life. Term life lasts for a specific period of time in your life and whole life lasts for your whole lifetime. Both of these policy types will pay out a death benefit to your beneficiaries when you die as long as your account stays current and in-force.
Why Owning Multiple Policies Makes Sense
Term life insurance policies usually last a short period of time. They can last anywhere from a couple months to 10, 20, or 30 years. The problem is that many people outgrow their term policies and do not get their premium payments returned to them when their policies end). They buy these policies when they are young and their life insurance premiums are cheap, but most of the time get nothing from them except the peace of mind that their loved ones are protected.
To avoid a lack of benefits in case of premature death, many young people opt to buy a whole policy while their term policy is still in effect. By doing this, they are able to get more life insurance coverage at a cheaper price. This is a good option because the price of cancelling one policy to replace it with another one can come with fees and expenses.
Another reason buying multiple life insurance policies makes perfect sense is due to major life changes. For example – what if you already have term life insurance but decide to have some (more) children? You would then want to add your children as beneficiaries. By doing so, however, your current beneficiaries would get short-changed on the death benefit. By purchasing a new, additional term life insurance on top of your current one, you can still take advantage of cheap rates without doing an expensive restructuring of your current policy.
Multiple Insurance Policies Might Be Your Best Option
Basically, owning multiple life insurance policies would allow you more flexibility and savings. Having more than one policy makes good financial sense because they won’t cancel each other out. Instead, they can work together in harmonious unison to meet your financial needs.
Let’s be honest, nobody knows what will happen in the future. Because of the many different types of life insurance, you can most likely find a policy that will fit your current situation in life. You might be young, wild, and free right now, but your responsibilities and debts might increase in the near future. If you aren’t sure what type of policy to buy, why not buy one that suits you now? In the future, you can buy an additional policy on top of it to meet your needs then.
Talking to a qualified life insurance agent or financial adviser is the best way to know what type of life insurance is right for you and whether or not you are a candidate for multiple policies. Start by getting a free quote at Life Ant. Enter your zip code above to begin.