Can You Have More Than One Life Insurance Policy?

There are many reasons why you might want to take out more than one type of life insurance policy, and there are also a number of different protection policies that you may choose to have in place. So, if this is something you have considered, let us help you understand more about taking out more than one policy.

Why do you need more than one life insurance policy?

Different protection policies can be used to financially protect against different life events. By taking out more than one protection policy, you can cover different financial responsibilities. This can include children, a mortgage, living costs or contributions towards funeral costs.

For example; you may wish to ensure your repayment mortgage is protected with a decreasing term policy, but you may also want income protection insurance to provide an income if you were unable to work due to an accident or sickness. By taking out these two policies, you can protect different aspects of your and your family’s life, should anything unfortunate happen.

Multiple life insurance policies can help you to offer financial support to your family for different reasons. You may be able to cover the mortgage payments and also offer financial assistance for day-to-day living costs.

It is important to consider how much cover you need based on your personal circumstances.

Do multiple policies have to be taken out at the same time?

It is not essential to buy multiple policies at the same time. Your need for a different policy type may develop at a later stage and your circumstances can change; for example, if you have children in the future. In this case, you may wish to take out another policy later down the line.

Some insurance providers may offer a discount if you buy multiple policies together. It is worth thinking about how much you might need multiple policies and when you might need to take out the additional cover.

It is a good idea to have some inclination as to what you are hoping to protect. This can help you to make the right decision when taking out more than one policy. However, the team here at Caspian Insurance can help you to build a bespoke protection package to offer you peace of mind for things that matter most.

How do multiple life insurance policies work?

If you decide to take out various life insurance policies, you might be wondering how it all works when it comes to claim stage. If you have multiple life insurance policies, it is possible for you or your representative to claim on each policy.

You or your representative would need to claim on each policy and go through the necessary process. A pay-out may be made on each policy providing the information given during the application process was accurate. It is very important to ensure the information given is correct as if it’s not it may lead to a claim not being paid or paid in full.

In some cases, you may have the option to increase your existing cover instead of taking out an additional policy. For instance, if you have increased your mortgage or have had more children. This is what is known as a special event, and generally you do not need additional underwriting to increase your cover. Remember that this will increase your monthly premiums, in order to cater for the increased cover. However, it’s important to consider whether these options are appropriate for your circumstances.

Critical illness and life insurance

In many cases, you can add critical illness cover to your life insurance policy. This combines the cover and you only pay one monthly premium. If you choose this option, both must be taken out simultaneously.

Many people choose to do this to ensure they have two types of insurance in place. Unfortunately, you are more likely to suffer from a critical illness than pass away, and this combined policy allows you to protect you or your family from whichever happens first.

It is important to remember that life insurance with critical illness cover will only pay out a claim for the full sum assured once. This means if you were to make a claim for the full payment having been diagnosed with a defined critical illness, the policy will then expire and you will not have any life insurance.

Life insurance vs critical illness cover

Critical illness cover works in a similar way to term-based life insurance. It offers protection for a fixed period of time that you decide on during the application process. Insurer providers may have an upper age limit. This can differ between providers so it is important to check.

Both critical illness cover and life insurance will provide a lump-sum, but they are designed to protect different outcomes. It is important to think about what financial support your family would need.

As stated above, Critical Illness Cover pays a lump sum benefit which can be used as you see fit. You may choose to use it as a replacement for your income, should you not be able to work. Alternatively, you may want to consider Income Protection.

The cover you need can depend entirely on your individual circumstances. So, when it comes to choosing the right life insurance policies, let the team at Caspian Insurance give you a helping hand.

The above does not constitute financial advice and may change depending on individual circumstances.