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Multiple life insurance policies

Can you have more than one life insurance policy?

published: 20 December 2022
Read time: 7 minutes

When it comes to life insurance you aren’t only limited to having one active policy covering you. However it doesn’t always make sense to have multiple live insurance policies – find out if it will suit your requirements

There are reasons why you might have more than one life insurance policy, for example, have one policy that covers your life, plus a joint policy that covers both you and your spouse.

If you’re a business owner, you might also need to protect your company by taking out key person insurance. This will pay out to help your business survive in the event of your death.

However, in most cases, it’s cost-effective and easier to change the terms of a single life insurance policy than to take out multiple policies.

Can you have more than one life insurance policy?

You can legally have more than one life insurance policy in the UK. For most people with life insurance, however, it may be more beneficial to stick with one policy and change the terms to meet your current needs.

It’s also worth noting that the price you’ll pay for a new life insurance policy could be quite different from your previous policy. This is because premiums are generally affected by things like age, as well as changes in your lifestyle and life events. This means it’s worth weighing up your options before taking a new policy out to ensure you’re getting the best deal.

A family sat on steps

How many life insurance policies can I have?

There’s no limit to how many life insurance policies you can have in the UK. You can legally hold as many different life insurance policies as you like.

For example, if you have another child or buy a more expensive home with a bigger mortgage, you can contact your existing life insurance provider and ask to increase the amount of cover accordingly.

You can use our life insurance calculator to work out how much cover you’ll need.

Why would I need two life insurance policies?

For most people, one life insurance policy – whether a single life or a joint life policy – should provide adequate cover. But you might want more than one life insurance policy if:

  • You want a separate joint life insurance policy that pays out should you or your spouse, life partner, or business partner pass away within the term.

  • You expect your descendants to have to pay inheritance tax and need a separate life insurance policy held “in trust”. This way, it won’t be included in the value of your estate when you die.

  • You run a business and need key person insurance to protect it if you die.

You may receive life insurance cover from your workplace, which is often known as death-in-service life insurance. It usually covers four times your annual income, but this may not be enough to cover your mortgage and living costs. Therefore, another life insurance policy could help.

What are the advantages and disadvantages of having multiple life insurance policies?

Having multiple life insurance policies comes with its own array of positives and drawbacks. If you’re thinking about taking out more than one life insurance policy, here are some of the pros and cons you may want to consider:

Pros

You can benefit from a variety of different policies that will cover for specific aspects of both your work and personal life.

If you’ve made changes to improve your lifestyle or health, taking out an extra policy could be cheaper.

Cons

If you take out more than one policy, you’ll have to pay premiums for each one of them.

With multiple policies, you will end up with more admin work.

What are the benefits of taking out joint life insurance?

Joint life insurance can be cheaper than taking out two single life insurance policies. It’s particularly common with couples and can also be a useful way to protect your business if you’re in a partnership.

However, joint life insurance policies only pay out on one death. In most cases, it’s the first death that triggers the pay-out, which can then be used to help the surviving partner and any dependents manage financially. Alternatively, you can opt for a pay-out on the second death. This could be, for example, to cover an anticipated inheritance tax bill.

You can have both a single life policy and a joint policy. But if it’s a choice between the two, taking out a single life insurance policy each has certain advantages, including:

  • Your beneficiaries will get two lump sums if you both pass away during the policy terms.

  • You have more flexibility about who gets the pay-out. With a joint policy, it’s generally the other policyholder.

  • You won’t have to cancel or amend the policy if you split up.

  • Your cover will continue even if your partner dies, meaning you won’t have to take out another policy at an older age.

Can I have more than one beneficiary on my life insurance policy?

Yes, you can have more than one beneficiary on a single life insurance policy. Keep in mind that for single policies, by default, the pay-out would form part of the policy holder’s estate. With a joint policy, the pay-out usually goes to the surviving policyholder, unless both of you die at the same time (when it passes to the other named beneficiaries).

Other UK beneficiary rules to be aware of include:

  • Minors can be beneficiaries but cannot personally claim their pay-outs until they reach 18. If they need the money to live on before that, it must managed by an appointed guardian who is more than 18 years of age.

  • If you take out a single life insurance policy “in trust”, UK law also allows your beneficiaries to act as trustees.

Can I take out multiple life insurance policies with the same provider?

Yes, you can. If you’re taking out additional life insurance to cover for a specific financial need, then it might be handy to use the same provider and keep all policies in one place.

But if, for whatever reason, you would like to have life insurance with another insurer, you’re free to do so too. For example, you could have a single life insurance policy with one provider and a joint policy with another insurer. It’s entirely up to you.

Do I need to purchase multiple life insurance policies at the same time?

No, you’re not required to take out more than one life insurance policy at the same time. In fact, it’s likely that you’ll only end up requiring a specific type of life insurance at a certain stage in your life. So there’s no real need to pay for different levels of cover if you don’t need them at that time.

That said, some insurance providers will offer discounts if you take out multiple policies at once. So, if you’re starting a family and moving house almost simultaneously, you may want to take this option into consideration.

Compare life insurance quotes

Comparing life insurance quotes with MoneySuperMarket is a quick and easy way to find affordable policies. Just tell us a little about yourself and the cover you need. We’ll search the market for a list of quotes tailored to your requirements.

You’ll be able to compare deals by the overall cost of your policy and the amount of cover you’ll receive. Once you find the one you want, just click through to the life insurance provider to finalise your purchase.

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