Can I hold more than one life insurance policy?
When it comes to purchasing car insurance or travel insurance we’d only ever take out one policy. Life insurance, however, isn’t quite as straightforward. Having multiple life insurance policies in place could actually be beneficial.
Why would I need multiple life insurance policies?
There are a number of reasons why you might need to take out life insurance, for example:
- Protecting your family’s financial future in the event of your death
- Covering your mortgage payments
- Protecting your business, ensuring that it can continue in the event of your death
- Covering costs incurred following your death such as funeral costs or inheritance tax
Whilst you may already have a life insurance policy in place, personal circumstances can change over time. Your original policy may not provide you with enough cover for your existing circumstances. If you would like to increase your cover, then the simplest way to do this is by taking out multiple life insurance policies.
Big life events can change your requirements for life insurance such as:
- Getting married
- Starting a family
- Moving to a bigger home
- Changing jobs
A change of circumstances can alter the way you look at your finances and you’d be wise to review your life insurance needs to make sure any policies you have in place are still fit for purpose.
Let’s take having children for example. You’ll want to make sure that you have a financial safeguard in place in order to maintain their living standards after you’ve gone.
Many people will have a life insurance policy in place that provides just enough cover to pay off your mortgage, leaving little or nothing else left over. So you’ll need to think about alternative options.
Should I change my existing cover or purchase a new one?
If you already have a policy in place then as a first step you’d be wise to speak to your current insurance provider. Explain that you would like to increase your cover and they’ll be able to discuss your options. Adding on extra cover will certainly increase your premium, however the higher payments may still work out cheaper than taking on a brand new policy.
To find out if taking out an extra policy could be more cost-effective, shop around using comparison sites. This will give you a good idea of monthly premiums you can expect to pay. Don’t be shocked if insurance premiums are much higher than you are already paying. Increasing age and declining health can have an impact on the cost of life insurance. You may still be in great health but you’ll likely notice the difference that being a few years older can make from when you took out your existing cover.
Whilst you may not be thinking about getting married or starting a family just yet, it may still be worth thinking about what sort of cover you are likely to need in 5, 10 or 20 years time.
You can hold multiple life insurance policies and take these out at anytime, however it may be wise to think about future cover whilst you are still young to take advantage of the cheaper premiums!
Speak to a life insurance specialist today to discuss your cover requirements in detail and find cover that’s right for you.
The above post is intended to be informative but does not constitute advice – financial, legal or otherwise. Any opinions given are the author’s own and do not necessarily reflect the views of So Smart Protect or So Smart Financial Services.