How You Can Get Multiple Life Insurance Policies?

Once you reach a certain age or a certain standard of financial stability, it would be in your family’s best interest to invest in life insurance.

Although it might be a bit of a cliché, it is nonetheless true what they say about life being short. We never know what might happen, and we might end up burdening our family and friends if we fail to financially prepare for such an eventuality.
Experts would say that if anybody would be hurt financially from your death, you need to invest in life insurance. Most people would only invest in one life insurance, and that would be enough for them and their family.

However, if you do consult some experts, they would say that it might be in your best interests to actually invest in two, or even more. Read on to find out if you really do need a second life insurance, or if you’re good with just one.

How to Own Multiple Life Insurances

But professionals also say that you are actually able to take out a lot without garnering much attention. The Insurers would usually only question what your needs are and a justification for the amount your wish when you ask for something around 20 to 30 times your income.

This would mean that as long as you keep it at a reasonable figure, and properly relay why you need such an amount, most insurance companies would likely accept your request.

Reasons for Multiple term life policies

One of the more common reasons to purchase coverage is to replace income just in case the breadwinner dies early. The solution is usually term life insurance, which covers the policyholder for a certain period, such as 10, 20 or 30 years.

Optimally, by the time the term expires, you wouldn’t need life insurance anyway as the debts would most likely be paid, and any children would by then be adults and generating their own income.

Instead of purchasing a single large policy, you can buy multiple policies of different amounts and term lengths in order to match your needs over time. Take for example, instead of a 30-year $1 million policy, you could opt for three policies:
30-year, $200,000
20-year, $300,000
10-year, $500,000

This is known as a laddering strategy and has the potential to save money, according to the director of insurance wholesaling at TIAA, Dennis Rupp. it can work in case coverage needs lower over time, and you can somewhat predict them.

If you decide to buy just one policy and find later you don’t need as much life insurance, most insurers will let you decrease the coverage and pay less, Ashe says.

Different policies, Different Goals

Replacing income is just one of the many reasons for you to take out multiple life insurance policies.
There are other factors you need to think of too. Here are some examples of other reasons why people take out another life insurance policy.

Small-business owner needs: If you were a proprietor of a small business, you would need a different policy for the business, and another for the family. This is so that any debts or obligations that the business has can be fulfilled, and so that another can pick up the reins of the business after your passing.

Long-term care: A hybrid life insurance policy has the ability to pay for long-term care if necessary. If you don’t max out the care’s benefits, it can be paid out at death. An option open to you would be to have a traditional life insurance to handle the family and a hybrid policy for long-term care.

Estate planning: In case you wish to leave life insurance money to a person no matter when you die, you are going to need a permanent policy. Experts advise purchasing term life for finite needs — like the period of time that others depend on your income — and choosing a permanent policy for estate planning.