There is no rule that forbids you from having more than one life insurance policy. In fact, having more than one policy may be encouraged in some situations. This is because not all life insurance policies are designed for the same purpose, and adding a small policy to your current coverage may not have a noticeable impact on your monthly budget. However, there are some considerations you need to take beforehand.

When Is It Ideal To Have More Than One Policy?

The answer lies in how different policies have unique uses. Not every policy is purchased for the purpose of leaving a large lump sum.

One example is final expense insurance. Final expense insurance has a relatively smaller death benefit, usually no more than $50,000. That’s because it is designed to cover funeral costs, which typically run between $7,000 and $12,000. Also, the premiums are lower due to the smaller death benefit, and you can get it regardless of your insurability risk. When you add this to the policy you already have, your loved ones can use the entirety of the main policy’s death benefit for their own needs. Your final expense insurance policy will make it so they won’t have to pay funeral costs on their own.

Another example of a second policy working in your favor is decreasing term life. Decreasing term life policies are typically bought when individuals begin paying mortgages. The death benefit amount decreases over time, but it matches the outstanding mortgage balance. And like other term policies, it’s only effective for a certain number of years (usually 10-30). The premiums are also low. This way, dependents in your household can cover the home’s cost without facing the possibility of losing it. 

What Are The Possible Disadvantages?

Certain combinations can lead to risking loss of a death benefit payout, or having to surrender a policy because of it being prohibitively expensive.

Holding multiple term life policies, for example, can lead to at least twice the amount in premiums with the risk of outliving your policy. If you outlive a term life policy, your loved ones won’t get the death benefit, and you will not be reimbursed for the premiums you paid. 

If you hold multiple whole life policies, you may not be able to afford the premiums. Whole life premiums cost roughly ten times more than term policies, and many cannot afford more than one because of this. That, and the death benefits of whole life are substantial on their own – up to $1 million in some cases. Funeral and mortgage costs make up a small, negligible percentage of that, rendering a second whole life policy unnecessary.

We’ll Give You The Policies You Need

At Game Changing Benefits, our number one priority is your ability to do what’s best for the ones you love. If that means finding you more than one type of policy, then that is what we’ll do, and at an affordable cost. Call us today at 972-331-1060.