How many Life Insurance can I have ?
How many Life Insurance policies you can have will depend on various factors you need to cover. Eg; Mortgage, Family or Business
Let’s now look at what types of Life Insurance Policies you can have.
3 Policy styles of Life Insurance you can have
Single life insurance means the policy is just arranged on 1 person’s life only. If a claim is then made, their policy then ends eg; Single Policy to help cover your Funeral costs.
You could also have 2 x single life insurance policies, which is known as ‘dual life insurance’. This means if you claimed upon one Life Insurance policy, then the other policy remains in place. Or if you died together, both policies would then payout to dependants. Eg; For Family Protection, where you need both life insurance policies for a full back up plan.
Joint life 1’st death life insurance policy is setup in 2 people’s name. But unlike dual life insurance, it will only payout upon the first person’s death & then it ends. The life insurance money is then paid to the survivor. Note; If you split up or get divorced, often Insurers may allow joint life insurance to become dual life insurance plans via their separation option. Generally joint life 1st death are slightly cheaper than dual life insurance plans, as they only have to payout once Eg; Help repay your Mortgage
Alternatively, a joint life 2’nd death policy will only payout upon the 2nd person’s or last death, then it stop’s. As such, it has no benefit to the 2 life’s but will benefit their family estate. Eg; Help cover Inheritance Tax bills.
How many Life Insurance Policies can I have ?
Here are some typical examples of how you can perhaps end up with several life insurance plans over various terms – all for different purposes.
- 1 Policy each via Death in Service Employee cover – until leave work
- 1 Joint Policy for Decreasing Mortgage Protection – 27 years
- 1 Policy each for your Family protection – 19 years
- 1 Joint Policy to cover Education Fees – 5 years
- 1 Policy each for Funeral costs – whole life
- 1 Policy for Business Shareholders Protection – 25 years
- 1 Policy to cover ex-Wife & maintenance for your Children – 11 years
- 1 Joint Policy for Inheritance Tax Gifts – 7 years*
* We do not advice on Inheritance Tax Gifts Policies, we only recommend the provider as per needs of specified cover advised by the IHT adviser.
Pro’s and Cons of having more than one Life Insurance Policy
Let’s look at some typical examples where by you may want to have to multiple life insurance policies and perhaps across different Insurers.
- Some Insurers only offer term life policies, not whole life insurance. This is quite common in the UK Life Insurance marketplace. As such, you would have no choice but buy from 2 different providers.
- Health issues mean your current Provider won’t insure you favourably for a new plan. As such, they consider your health issue warrants an extra premium health risk rating eg; Your Insurers loads your premium or charges you extra. However, another Insurer is happy to accept you upon their standard terms.
- Your existing Insurers no longer offers any new life insurance plans. Due to economic trading conditions, many well known UK based Insurance Brands have merged or stopped offering new life insurance policies over the years.
- Some Companies specialise in certain Life Insurance sectors eg; You are looking at over 50’s no medical life insurance policies.
- Insurers may require medical evidence above a certain level. Dependant upon your age or policy type, Insurers can impose their non medical underwriting limits. So, you could be allowed life insurance without medical evidence, but above a certain limit GP reports & full medical tests are then required. In this instance, to help avoid delays, it may make sense to apply across several Insurers for those people who want cover immediately and with the least hassle possible.
- Your existing Insurers are less competitive for any new life cover. Life Insurance prices vary from day to day, across age groups to smoker status. It may well be your existing policy was the cheapest provider deal then, but is now the most expensive deal.
- Insurers only allow life policies upto a certain amount or premium. For some companies plans, they may well limit the amount of cover you can have with them to reduce their overall risk exposure. Eg; Over 50’s Life Insurers allow you to spend £100pm or based on your age, allow £10,000 life insurance. You may want more cover.
- An Insurer has just bought out newer improved policy benefits ie; inclusive premium waiver & terminal illness. Your existing plan has less features eg; No terminal illness or premium waiver benefit.
- You now have better health, so want to see if you can get a better insurance deal. Eg; At the time you took out your existing plan, you were a smoker but have now given up for over 12 months. As such, you are entitled to apply for cheaper non- smoker rates. You are unable to adjust or cancel your existing plan but need new cover.
- Spread risk across various Insurers. Some people are naturally cautious and worried if a Life Insurance company may go bust and not payout. Ie; they would rather have 3 x £250,000 plans with 3 Insurers than £750,000 with just 1 Insurer, even if it is more expensive.
- Your existing life insurance plan was set up in trust. So person ‘A’ has their beneficiaries of Y & Z. You now need another life policy but their trustee is now person ‘B’ with new beneficiaries of C & D. For clarity, you prefer the 2 plans via different Insurers. Eg; You have re-married and want the separate policies to go to your children from different marriages.
CONS of having multiple Life Insurance policies
- Booking skills needed to keep a tabs on the various life policies
- Extra paperwork likely from all Insurers ongoing correspondance
- More Administration at claim
- Having to deal with numerous Insurers & their claim procedures
- Some IFA’s do charge fees for their advice & time, so maybe costly
- Legal Executors, due to the extra time involved, are more likely to charge higher fees upon managing an estate at claim.
- Will also require more copy death certificates for various Insurers
- Naturally more life insurance plans also mean more expenses
- Several trustees maybe involved so co-ordination issues
- Various different witnesses could be required to sanction paperwork
- You may need to mention some or all of the policies within your will
- If you move house or move bank accounts all the various Insurers will need to know
Note: Several Insurers do offer ‘menu style plans’ allowing you to have several of their life insurance plans all under ‘1 roof’. This may offer some cost savings to have more than one Life Insurance.
CONCLUSION - Can you have more than 1 Life Insurance Policy ?
As you can see from the various reasons explained, the answer is YES. Noting that you may probably have different insurers already for your car, home, contents, travel, pet, breakdown, phone insurances etc;
I hope you found this article on ‘Can you have more than one Life Insurance’ interesting & thought provoking as to these various reasons.
Please contact us for:
- No obligation Professional Broker advice
- Compare Leading UK Insurers for more than one life insurance
Take care of yourself and loved ones
Martyn Spencer | Financial Adviser @ Uk Life Insurance Quotes