Can You Have Multiple Life Insurance Policies In 2019
There are several reasons why someone would need multiple insurance policies; however, the process of figuring out if you can actually own more than one policy can seem scary.
But what if I told you:
That there is a way to have multiple policies with one company or with different companies, and the process isn’t that hard.
Today I will explain the cases in which you can have multiple life insurance policies and also what’s required to qualify for additional policies.
In This Article
Can You Have Multiple Life Insurance Policies?
The simple answer to this question is Yes! You can absolutely have more than one insurance policy.
However, there are specific requirements that you must meet to have multiple policies, and we detail them below:
You're Willing To Go Back Through Underwriting
Even if you are with the same insurance company and you decide to purchase an additional life insurance policy, you will need to go back through the entire underwriting process.
This means you might need to take another medical exam and obtain doctors records or even go back through financial underwriting.
This process can be a bit long sometimes, but some alternatives don't have such a drawn-out process.
Just keep in mind that you can still be declined for this new policy if your health situation has changed.
So it's best to purchase these policies at the same time if you can.
You Have The Income
Whenever you purchase a life insurance policy, you are asked about your income and if it is an earned income or a different type of income like retirement.
This question is asked because the insurance company is not interested in selling a $20 Million dollar policy to someone who makes $50,000 per year.
Insurance wasn't created to be some type of Lottery, but to protect a family if they suffered a loss of someone that provided financial support.
You can usually purchase up to 30 Times (30X) of your annual earned income in life insurance and generally between 5 to 10 times or (5X) to (10X) of your unearned yearly income.
So this means on a $50,000 salary you can have 1 policy for $1.5 Million, 2 Policies at the same or different company for $750,000 or 3 policies at the same or a different company for $500,000.
Whatever option you choose as long as you meet the financial / income guidelines.
Why Would You Need Multiple Life Insurance Policies?
Caps On Policy Benefits
You might not have thought of this, but it is the reason that I have more than one life insurance policy.
I initially looked to purchase $2.5 Million in coverage from only one insurance company.
However, they had a cap on their living benefits part of the policy at only $2 Million.
If you don’t know what it is, we have an entire article on Life Insurance With Living Benefits.
Because of this cap, I purchased my additional $500k life insurance with no exam from another company.
If you were divorced and decide to get married again, your ex-spouse probably still has that policy on you.
However, If you need life insurance to protect your new family, you are going to need further coverage.
There is probably no way that your ex is going to let you put your new spouse on their policy.
So, in this instance, getting a new policy is entirely a requirement.
You Have A Baby
If you have a new baby and your policy doesn’t have enough time remaining on it, you will probably need to purchase a new policy.
You want to make sure you have enough coverage for your kid.
If your policy is only $100,000 and you have a baby, you probably are going to need 0,000 in coverage, which means you will need to apply for new coverage.
It is essential always to have adequate coverage when you have a small child.
Not Having All Your Eggs In One Basket
Another final reason is that some people would prefer not to have all of their eggs in one basket.
If one company goes out of business or you don’t like their customer service, or if you just want to make sure to split that $100.00 per month bill into 3 $33.00 per month bills.
That way at the least you don’t lose all your coverage if you can only afford $33 one month.
You can also make sure that you are with all A-rated carriers through A.M. Best.
Multiple Policies Because Of Business
Another reason you may find yourself needing more than one life insurance policy is that you have a few business dealings like below:
You Need Your SBA Loan Funded
What most people don't know is that if you want to close on your SBA loan, you might need a life insurance policy.
Sometimes you will be required to get a life insurance policy for the amount of the loan for a set amount of time.
The lender wants to be sure that if you die before you've had a chance to pay the loan back, they are covered.
Of course, this insurance policy would be on your life, but the lender would be the owner of the policy.
You Are A Key Man
If you start a small business and its total success relies on you being alive, you probably will be placed on a Key Man life policy.
These policies are purchased as a sort of protection of investors money into your business.
Just like with the SBA loan, it is all about making sure you have life insurance in case of an untimely death.
IN THIS ARTICLE
As you see, it is very easy and legal to own more than one life insurance policy, and there are tons of reasons as to why you might need more than one.
The good news is that you can have more than one policy, so feel free to get the process started.
If you need more than one policy, you can click on the link above, or if you want to learn more, you can read our Haven Life review.
Sa El is the Co-Founder of Simply Insurance and a licensed Insurance Agent with over 11 years of experience in the industry. He specializes in Life & Health Insurance and is certified in Long Term Care Insurance in the state of Georgia. He is also a licensed real estate agent in the state of Georgia (License #382602), an entrepreneur, insurance educator, and freelance writer.