Published: June 2025
Many individuals are under the impression that they only need one life insurance policy. However, what if one isn’t sufficient? The straight answer is – yes, you can take out multiple life insurance policies, and generally speaking, it’s a wise money move.
In the article, we will profile the pros and cons of having more than one life insurance policy and explain when it can make sense to have multiple life insurance policies.
✅ Can You Legally Have More Than One Policy?
Yes. There is no actual limit of the life insurance policies that a person can have. More often than not, people do have one term and a whole life policy, or they are covered simultaneously by personal and employer-provided insurance.
However, insurance companies will monitor the total amount of coverage you are applying for. If they find that it is in excess of your income and financial responsibilities, they may limit their liability or even deny your application.
📈 Pros of Having Multiple Life Insurance Policies
1. Custom Coverage for Life Stages
Various policies are likely to meet different human needs. They can range from:
- A term policy for your mortgage
- A separate policy for children’s education
- A whole life policy for long-term wealth planning
2. Cost Savings
Getting multiple smaller term policies throughout the years may actually result in lower costs if compared to one big policy – this is especially true if the change of needs is gradual.
3. More Flexibility
You can allow a term policy to terminate itself when it is no longer useful (for example, after children have matured) while keeping other policies alive.
4. Employer Coverage Isn’t Always Enough
At best, work policies provide coverage only up to the time when you leave the company. It is a personal policy that creates a safety net whatever happens.
⚠️ Disadvantages of Holding Multiple Policies
1. It Can Be Confusing to Manage
Keeping track of premium payments, policy terms, and beneficiaries under multiple policies can turn out to be a headache.
2. Possible Over-Insurance Situation
In case the total of insured amounts is higher than the sum of all your liabilities, insurance companies may not only doubt the necessity of extra policies but also refuse them.
3. Many Medical Tests
Apart from applying for each policy, you may also need to go through underwriting and possibly a medical examination unless you use instant issue policies.
4. Likelihood of Larger Premiums
In most cases, the bank is split between two or more small policies and, given the separate charges and administrative expenses, can become costlier than just the first big one.
🧠 What Situations Would Trigger a Necessity for Multiple Life Insurance Policies?
- Your recent purchase of a house or acquisition of new debt
- You want to give separate benefits to different beneficiaries
- Your employer’s plan lacks portability
- You are strategizing estate or heritage funding
- Your family or business are in a growth phase