Life insurance provides a valuable safety net for your loved ones if you pass away unexpectedly, but is there a benefit to having more than one coverage? Let’s discuss the use of multiple policies and how they can help you meet your financial goals and responsibilities.
Can You Have Multiple Life Insurance Policies?
It’s completely possible and legal to have more than one life insurance policy. In fact, most individuals have at least two active policies: one from their employer plus their own term life insurance or permanent life insurance.
Wondering if the application process will be the same for people with existing coverage? No life insurance company will object to you having multiple policies, but they will likely give your benefits a more in-depth look.
If you want your application to move ahead without a hitch, make sure your desired benefits match your assets and income level. Some insurers will also require a medical exam to assess your insurability. Getting more than one policy might seem like extra work at first, but the benefits might be worth it.
What Are Its Advantages?
There are many reasons why multiple policies can help you and your loved ones, including:
● Getting main coverage. The life insurance you get from your employer can be a cost-effective way to get coverage, but this should only serve as a supplementary policy. We recommend having at least one individual policy, so you don't have to worry when you leave your current job.
● Achieving financial goals. Different types of life insurance can help you achieve different financial goals. For instance, a term policy essentially acts as a basic income replacement, while a permanent policy builds cash value that can serve as retirement savings for later in life.
● Meeting financial obligations. When your financial situation changes – like buying a new home or having another child – you might need more coverage. It’s often easier to get an additional policy since replacing an old one can present many issues like contestability, churning, and surrender fees.
● Making an insurance ladder. An insurance ladder involves getting multiple term policies with varying term lengths that expire as you pay for your debts. By using this strategy, you can have a lower premium payment compared to getting only one higher-coverage policy.
● Long-term care coverage. Additional life insurance can help cover long-term care costs. For instance, you can get variable universal life insurance (VUL), a type of permanent life insurance with an investment component.
Consult the Life Insurance Experts in Dallas, TX
It’s never a bad idea to consult with an independent agent if you plan on buying life insurance. At the Thumann Agency, we can help you and your loved ones reach financial security by recommending coverage that matches your needs.
We consider every factor, from the life insurance costs to the number of years the policy will be active. Our insurance experts will also scour the market for life insurance quotes so you can make an informed buying decision. Contact us today at 972.991.9100 to request a free consultation!