Is It Possible to Purchase Multiple Life Insurance Policies?
Updated On Aug 19, 2022
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Depending on the alternatives accessible to you and the particular coverage requirements you have, it is both permissible and lawful to have numerous life insurance plans. For instance, many people have both a personal policy they bought on their own and group life insurance, which is typically provided by their job.
You can only get well over one life insurance policy if you are seeking to obtain coverage for which you are not eligible; the average person is only permitted to obtain a total life insurance policy with a face amount equal to up to 15 times their yearly income.
The following situations illustrate why it could be advantageous for you to have multiple life insurance policies.
Reasons for Purchasing Multiple Life Insurance Policies
One of the major reasons people get numerous policies is to supplement a current life insurance policy in order to obtain more coverage when their requirements change.
For instance, because group life insurance is typically supplied without any medical requirements and is very simple to get approved for, many people choose to enrol in it. The drawback of those plans is that they sometimes don't provide as much protection as you want, and your protection will end if you quit your employment.
The majority of individuals with group life insurance are eligible for more protection, but you'll need a solid financial justification if you want to raise your total mortality benefit over a particular threshold. Here are certain scenarios in which it makes sense to increase your life insurance coverage overall.
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Mitigating Risk
When a life insurance provider experiences the worst-case situation, it is quite unlikely that you would be left without coverage. However, if you want to be very cautious with your beneficiaries' future financial assistance, having policies with many different life insurance firms might provide you with some peace of mind.
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Supplementing Employer’s Life Insurance Policy
Increasing your coverage outside of the group policy offered by your company is one of the most frequent reasons you might be thinking about getting a second life insurance policy. Although group insurance is a perk that many employers provide to their staff, the protection amounts are sometimes rather modest when compared to a conventional term life policy. The great news is that adding personal insurance that satisfies your needs to your existing coverage is simple.
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Providing Inheritance
The main motivation for purchasing one or more life insurance policies is frequently the desire to provide for your partner, children, or other family members following your passing. It could be a great idea to purchase secondary insurance if your main policy doesn't provide adequate protection for your spouse or dear ones in the case that something were to happen to you. The death benefit from supplementary insurance can turn into a nest egg for your loved ones if you've previously saved money or have coverage for final costs.
Conclusion
Purchasing numerous life insurance policies might be a wise move if you want to adopt a more complex financial strategy, such as the ladder method, or if you want to receive more coverage to protect against a particular obligation, such as a mortgage. Make sure to speak with an agent or a financial advisor to determine which choice is appropriate for your situation.
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