If you are looking for a short answer, YES, you can have more than one insurance policy if you like.
For all who wonder if that is a smart move, please keep on reading.
We can all agree life insurance is one of the cheapest and best ways to protect your family's estate and wealth, right? So, if one policy is so good, why not have more of them and get even better protection and more money? You could, but this theory is not so simple in practice, although possible. This method is called laddering.
First, ask yourself, what are your intentions and/or what are you trying to accomplish with having more than one policy? What are your coverage goals?
These are some of the most common and justified reasons for owning more than one life insurance policy:
- You need to get the greatest coverage for your monetary obligations, like a youngster's educational expenses, on the off chance that your current course of action doesn't cover it.
- You stopped smoking, or you've made other positive well-being changes, so you need to look for better expenses while keeping your old approach.
- You wish to take out two single life coverage arrangements instead of a joint one.
- You have more than one security setback; for example, you could require diminishing protection to safeguard a reimbursement home loan and level cover for family assurance.
- If you want to purchase an enormous face sum (upwards of £10 million), you may need at least two policies to diversify the risk.
- You may want to combine term life insurance with another type, like a whole-of-life insurance policy.
- You took out a mortgage while already having an existing life insurance policy, and your protection isn’t sufficient to cover the amount you now own, and in case of your absence, your family may struggle to cover the mortgage payment.
There are no laws that prevent you from owning more than one policy and it is possible to take out numerous life coverage policies from the same or various insurance providers. Be that as it may, when you apply, your selected provider will quite often take a gander at any current inclusion, so you need to ensure the strategy you're pursuing won't make you surpass your insurability limit.
You also need to take into consideration that monthly premiums will probably be higher if you have, for example, two policies that are worth £250,000 each than if you only have one premium with a £500,000 payout.
Laddering isn't an idea bound to insurance. It is an overall monetary idea. It's the purchasing of a few more modest financial vehicles of changing terms rather than one huge one. These more modest "rungs" may give steadier returns and more adaptability than a solitary, enormous venture. You can find this term also in my Life insurance dictionary page HERE
For example: Rather than purchasing a £900,000 life policy, you could purchase more term approaches of various sums and lengths to match your needs:
- A 10-year, £500,000 term life policy.
- A 20-year, £250,000 term life policy.
- A 30-year, £150,000 term life policy.
If you die within the first ten years, every one of the three contracts will pay out, giving your family a £900,000 payout. These assets can assist with supplanting your pay and help pay off enormous obligations like a home loan while your children are still living at home.
If you die within the second decennary, the first policy has lapsed, yet the other two have not, and your family will get £400,000. The payout can assist with taking care of school expenses or everyday costs for any individual who actually depends on your paycheck.
If you die within the third decennary, just one policy stays in force, and your recipients will get £150,000. At this point, your monetary position might have diminished how much extra security you want. Your children might be monetarily independent, and the more modest disaster protection payout can take care of any leftover costs, like home loan instalments or burial service.
More about life insurance can be found on www.geniusjames.net