Can you have more than one life insurance policy?

In short, yes – you can have more than one life insurance policy.

Life insurance can help to protect your loved ones by providing them with a lump sum payment, but is it worth you holding multiple policies?

This article will answer key questions and inform you of everything you need to know.

How many life insurance policies can you have?

There’s no legal limit on the number of life insurance policies you can buy.

As long as you have the budget to pay multiple premiums, you can have as many policies as you need.

While there aren’t any laws regarding how many life insurance policies you can hold, insurers often won’t let you buy cover that you don't need.

For many people, having just one life insurance policy is likely to be enough, but in certain situations it could be beneficial to have multiple policies.

What are the reasons for buying multiple life insurance policies?

You might consider having multiple life insurance policies if:

• You want to increase your cover amount – If you can’t make changes to your existing policy, buying extra cover means you can leave a greater lump sum for your loved ones.
• You want to protect multiple costs – You might buy multiple policies to cover different costs when you die, for example your mortgage or your funeral.
• You've had a change of circumstances - perhaps you've joined the property ladder or grown your family since you first bought life insurance, layering on a new policy can help you to keep up with changing needs.
• You have ‘death in service’ through your employer but you want personal protection - Death in service is an employee benefit that pays out a multiple of your salary if you die while in employment. It’s a generous benefit to have but it may not always cover all that you need it to. Buying a personal policy can help to ‘top up’ the shortfall and you’ll also be protected if you leave your employer.

You have a joint policy with a partner but want your own policy - You might already hold a joint life insurance policy with your partner to protect a shared financial commitment (such as a mortgage). But you might want a personal policy to protect your own commitments or so that someone else can benefit from the policy (such as a child, sibling or parent).

What types of life insurance are available?

There are various types of life insurance, each suited to protecting different costs:

When you buy multiple life insurance policies, it's common for them to cover specific costs.

For example:

• A decreasing term life insurance policy can protect your mortgage
• A level term life insurance or family income benefit policy can cover family living costs

Can you have two life insurance policies with the same provider?

Yes, you can have 2 life insurance policies with the same company. You could even have more than 2.

Some insurers may have a maximum cover amount. This is essentially a maximum amount that the life insurance company pays out when you die. You can't buy extra policies that would take you over this amount.

In this scenario, you’d need to buy a policy with a different insurer.

Do I need to buy multiple policies at the same time?

No, you don't have to buy more than 1 life insurance policy at the same time.

It’s common for people to buy extra life insurance policies as a result of a change in circumstances during the policy term, for example growing your family.

Can you claim on two separate life insurance policies?

Yes, as long as the policies are active when you die, your loved ones can claim on all of your policies.

It’s important to let your family know of all life insurance policies you have, particularly if they're with more than one insurer.

This means, when the time comes, they know what paperwork to find and who to call to make a claim.

Can I have more than one beneficiary on a life insurance policy?

Yes, you can name multiple people as beneficiaries.

A beneficiary is someone that will benefit from the pay out of your life insurance policy.

When having multiple beneficiaries, you'll need to declare how you want your pay out to be split.

For example, you may want the majority of your pay out to go to your spouse and the remaining percentage to be split between your children.  

What are the pros and cons of having multiple life insurance policies?

Like any decision you make, it's important to weigh up the pros and cons:  

What to consider before buying multiple policies

Before you buy multiple life insurance policies, here are some things to consider when making your decision:

• Check your budget – the more policies you have, the more life insurance premiums you’ll need to pay. It’s important to weigh up whether you could afford these ongoing costs. If you stop making your monthly payments, your cover will stop and your loved ones won’t benefit from the pay out.
• Contact your insurer to see if you can make changes to your existing policy – if you simply want to increase your cover amount, this might be possible to do to your existing cover. Some policies come with a feature known as ‘guaranteed insurability’ which allows you to make changes to your policy (such as increasing/reducing your cover amount) without providing new medical information. This could work out cheaper than taking out a brand new policy.
• Do your research and compare quotes – when using a comparison site (like Confused.com) you’re not obligated to buy a policy you get a quote. This means you can see if adding on a new policy is an affordable option before you commit.
• Let your loved ones know of all policies you have in place – if you do take out multiple policies, tell your loved ones. This can make the claims process a lot easier for them when you die, as they’ll know who to claim with.