There are no legal limits to the number of life insurance policies you can have. However, make sure that the benefits you are requesting do not exceed what would be reasonable for a person with their expected level of income and assets. While you can have more than one life insurance policy, you will have a limit on the total amount of coverage you can get. That limit is largely linked to your income or net worth.
Having several life insurance policies of different durations is called staggering and is a cost-effective way to reduce coverage as risk dissipates. It's possible and legal to have several life insurance policies depending on the options available and your specific coverage needs. The main reason for having life insurance is to provide a safety net to those who have your financial support. These policies offer some significant advantages compared to term life insurance, including the fact that they generate cash value that can be used while you're still alive.
Needs for a smaller amount could persist after that, says Allan Phillips, certified financial planner, life insurance expert and founder of Tree Street Advisory. The tiering strategy is when you have several term life insurance policies with different terms that expire as you pay your debts. Term life insurance that pays off your outstanding mortgage debt and more if you die unexpectedly. For example, you may have already secured life insurance with a competitive monthly premium in your youth that you consider sufficient.
It's common for people to seek an additional policy after experiencing an important life event that affects their finances, such as buying a home or having a child. If you submit multiple life insurance applications at the same time, this will generate some red flags between providers and the MIB. Married couples are likely to want to have individual life insurance policies, especially if one spouse depends on the other's income. The agent can then help you buy in the market and, if necessary, “build a potential argument for why an insurer should consider insuring you above the maximum,” he says.
The amount of coverage you can buy in relation to your income varies by age and may vary from one insurer to another. They will also interact with reinsurance companies that act as entities reporting coverage already provided to a person by another life insurer. You can have more than one life insurance policy and you don't need to take them out from the same company.