If you’ve already got life insurance cover, but think you need more, you may be wondering whether it’s possible to have more than one life insurance policy.
The simple answer is: yes.
Technically, there’s no limit to the number of life insurance policies you can have. You could buy them through different insurers, though if you were to buy them through the same insurer, they’d probably have a maximum amount they’d be willing to cover in total, across all of your policies. It’s also worth noting that insurers generally won’t insure you for an amount of cover they deem to be excessive – i.e. a combined level of cover they don’t feel you need.
All of this said, before buying an extra policy, you should always check whether you can change your existing life insurance cover. It can often work out cheaper and more effective to simply amend the terms of your existing policy, rather than buy an entirely new one – not to mention the fact that it could be simpler, from a life admin point of view. It means you’d only have one policy to manage while you’re alive, and your family would only need to claim one policy if you died.
Why buy more than one life insurance policy?
There are various reasons why people might consider taking out more than one life insurance policy but, generally, it’s because the cover you already have is no longer sufficient for your needs – i.e. it’s not enough to protect the people and things you want to be protected in case you die. Examples include:
- You already have cover, but want more
As life changes, so too will your life insurance needs. Events like having children, getting a pay rise, or increasing your mortgage may lead to you having greater financial responsibilities in your day-to-day life – and therefore more to protect in case you die. These events could leave you under-protected by your existing policy.
- You have cover through your employer, but want your own
If you have some sort of cover through your employer (death-in-service, for example), the amount of cover might not meet all of your needs, depending on your personal circumstances. What’s more, you’d no longer be covered if you changed jobs in the future – and when it comes to buying cover for yourself, it tends to be cheaper the sooner you do so.
If my needs have changed, can I change my existing life insurance policy?
It’s always a good idea to look out for ‘guaranteed insurability’ when first taking out a life insurance policy. If your policy has this feature it means you may be able to increase the cover in your existing policy if certain life changes happen to you, typically including:
- Getting married or entering a civil partnership
- Becoming a parent by having or adopting a child (or step child)
- Getting a significant pay rise by promotion or change of employment
- Taking out a new mortgage or remortgaging
But remember: it’s always best to check what is and isn’t covered by your own policy, as this can vary from insurer to insurer. You’re only usually eligible to use this feature up to 90 days after the event has happened. Plus, there’s likely to be a maximum age for using it (usually around 54) and a cap on how much you can increase your cover by (e.g. 25%, 50%, or 100% of your original cover amount).
In general, guaranteed insurability is a useful way of making sure your life insurance cover stays in line with your current protection needs.
If my needs have changed, can I cancel my existing life insurance policy and just get a new one?
If your protection needs change, you might think about cancelling your policy and buying a new one – but we’d always encourage you to be wary about doing this, for a couple of reasons. First, it might be more expensive to get covered, because life insurance premiums are correlated with your age (and you’d have been younger when you took out the original policy). Second, if you’ve developed a health condition since taking out the original policy, it may be difficult to get covered at all. You should certainly never cancel an existing policy until you’ve been approved for a new one, and you’re happy with the monthly price.