Can I have more than one life insurance policy?

Can I have more than one life insurance policy?

29 Apr 2021

Yes! You can have more than one life insurance policy - there’s no hard and fast rules on having a combination of different covers. It’s not commonplace though, as most people find that one life insurance policy is enough to cover their needs.

If having more than one life insurance policy is something that interests you, however, there’s a few different routes that you could go down. Having additional cover can be beneficial for many people, for many different reasons. Let’s take a look at a few of these reasons now.

Life insurance for families

When you start a family, is one life insurance policy to cover all of you enough? As a couple looking at life insurance, if neither of you have an existing policy in place, you will likely choose between joint protection or covering each parent individually with two single policies. You can also look at family income benefit, which pays a monthly tax-free payment rather than a lump sum.

If you choose a joint life insurance policy, two lives will be covered (you and your partner) and you’ll typically receive a pay out when the first person in the couple passes away. At this point, the policy ends. 

With this in mind, two single life insurance policies may offer much better value. This means that, should the worst happen and both parents pass away, your beneficiaries will receive two payouts, providing a much-needed financial safety net for your children in difficult times. 

Yes, you’ll be paying slightly more each month across two different policies, as joint life insurance is generally the cheaper option. However, it may not work out as too many extra pennies - and will definitely result in a whole lot of extra value.

Life insurance for your business

If you are a business owner, you could also consider business protection. This refers to a group of products that are designed to help keep a business afloat in the event of death or illness. Business protection falls under the life insurance umbrella, however a standard life insurance policy won’t cover these more specialist needs.

By taking out business protection, you can protect the key people within your business with key-person insurance, ensure business continuity, protect your business loans and you can set up your cover in a tax efficient way. You could also look at offering your employees life insurance benefits, such as death in service.

Additional life insurance cover

Speaking of death in service cover, perhaps you are an employee in a business that provides you life insurance cover as part of your benefits package. Whilst this is great, you may still decide to take out your own life insurance policy to give you some extra protection.

After all, if you leave your job or lose it, you will no longer have this cover. You will need to be on your company’s payroll when you pass away in order for your beneficiaries to receive the payout. By taking out your own policy, you can rest assured in the knowledge that it will remain yours, and you can personalise your cover to best suit you and your family.

Should I have more than one life insurance policy?

Just because you can have more than one life insurance policy, it does not necessarily mean that you should have more than one life insurance policy.  It may make more sense practically and financially to simply amend the terms of your current life insurance policy so that it better meets your needs. 

Of course, your life, earnings and the things that matter to you most are bound to change over the years. For that reason, your life insurance can change with you too. You can sometimes increase the amount of cover you have, and you can also often choose additional cover such as critical illness cover or income protection. You may find that adding one of these alongside your current cover will offer you that extra protection that you are after.

If you are after some advice on whether you should take out a second life insurance policy, we’re here to help. Contact us or give us a call on 0800 316 7253 and let’s look at your circumstances and options.

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