Can I legally take out more than one life insurance policy on myself?

Question

I'm only 23. But I consider myself older, mentally. To prepare for my daughters security in the future, I'm considering taking out a few policies of life insurance on myself.. because I haven't really seen any that offer the amount of money I'd like her to have if I were to pass for whatever reason (you never know these days). Does anyone know if that's legal? I mean, one doesn't cancel out the other, does it? And advice is appreciated.. :)

Answer 1

Yes, you can take out multiple life insurance policies. I have three myself with a mix of different types including group term through work (because it's cheap, so why not?), a separate 30 year term (to cover my lost income), and a small whole life to cover final expenses.

Buying multiple policies isn't all that unusual. However, I think you're underestimating the amounts that are available. I know there are certainly coverage options available in the millions of dollars. They do require plenty of underwriting info to qualify for those, of course. But the price of the coverage may shock you if you get a Universal (which can act like a term policy that, effectively, never runs out since most contracts run through age 100+), or term (for 20-30 years.) If you're in good health, the price at your age may very well be reasonable.

The thing is, you would have to list how many policies you have, or have applied for when you put in a new application. You would also have to help any life insurance agent you're working with to complete an "agent's certificate" which would be an overall financial statement, to justify the coverage amounts you've requested. You may get some rather pointed questions from insurers if you've got a networth of $2,000, annual income of $18,000, and you're asking for $50million in coverage. (Keep in mind, there are also certain types of policies that offer riders guaranteeing you the ability to buy additional coverage at a later date based on your current rate. The riders are very inexpensive and that way you aren't locked into the large amounts, but you do have the option to get them later, regardless of your health condition.)

Also, it's generally better, if you're looking for sheer payout amount, to buy the coverage in a lump sum because the cost per thousand for coverage goes down as the total face amount goes up. (In other words, the more units you buy, the less each unit costs you.)

Your best bet is to find an agent who will listen to you and talk about what you're trying to accomplish before they start spouting off the "answers." Any agent worth dealing with knows that the answers are different for everyone, depending on what the person in question is trying to accomplish.

Answer 2

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RE:
Can I legally take out more than one life insurance policy on myself?
I'm only 23. But I consider myself older, mentally. To prepare for my daughters security in the future, I'm considering taking out a few policies of life insurance on myself.. because I haven't really seen any that offer the amount of money I'd like her to have if I were to pass for whatever reason...

Answer 3

You can take out as many as you want.

You might want to talk to a financial adviser to see if buying a lot of life insurance is really your best option. You might want to consider some life insurance and investing the rest in some other type of investment.

I'm not a financial adviser so I honestly don't know. I agree with getting some life insurance so your children will be taken care of. The older they get, the less you'll need to support them though as they'll have fewer years that they'll need support so it seems to me that if you invested in some Funds or something like that, along with the life insurance, if you live until they are grown up and no longer need your financial support, that money would still be there invested for your retirement.

Answer 4

This Site Might Help You.

RE:
Can I legally take out more than one life insurance policy on myself?
I'm only 23. But I consider myself older, mentally. To prepare for my daughters security in the future, I'm considering taking out a few policies of life insurance on myself.. because I haven't really seen any that offer the amount of money I'd like her to have if I were to pass for...

Answer 5

Where I come from, you can – legally –take as many “Life insurances” as you like, provided that you are able to afford their premium payments. Nothing illegal about it, as the Insured person is the only one who can put a value for his life! This is of course not the case for property insurance, given that properties can be valued in the market. In fact, if u have 2 motor insurance on your car for example, u would have paid 2 premiums, but both insurers will share the loss!
So, to conclude, additional life Insurances do not cancel each other, but you should declare to each insurer your other policies.
Hope I was of a help.

Answer 6

You can usually get a higher level of coverage from the same company. If not, then yes, you can get additional coverage.

You might consider a whole life insurance AND a term life insurance policy.

Consider this though, you are young and you might be better off using the money and investing it for your daughters' educations.

It's good to be responsible just be careful and not go overboard.

Answer 7

There is no law on how many life policies you can buy. I don't know who is giving you advice that you should buy bunch of life policies on yourself, but that is a very bad idea to do so because its going to cost you lots of money. Each policy has its own fees of around $75-$200 (depending on the insurance company). If you divide your coverage among them, the cost per thousand face amount is more expensive if you were to combine them all into one policy. The main point is that it you will be spending more money on life insurance than you need to if you buy multiple policies.

For example, I had a client who had 5 life policies on himself (3 universal, 1 variable, and 1 whole life) with a total coverage of $525,000. He was paying a total of around $3900/year on all of them. So I compare what he pays to a 35 year term and gave him 3 different quotes. I'm not going to say them here, but I did reduce his premiums by over 60% in each quote.

If you are looking to open a college fund for your child, you should consider looking at 529 plans, which are offered in every state. You should check your state's 529 plan before looking into other states.

Don't use life insurance as way to save for long term goals. There are better options out there such as mutual funds in tax-deferred accounts (Traditional IRAs, Roth IRAs, variable annuities, 401k, etc)

Answer 8

Yes, you can. But it's more expensive to take out 5 $100,000 policies than it is to take out 1 $500,000 policy.

Go to a local agent, and tell them how much insurance you want to buy, and have them get quotes.

Answer 9

yes, its legal to have multiple insurances. it might even be smart in the event that your insurance company gets into financial trouble. but, i find it surprisng that a 23 year old would NEED multiple insurance policies to get an adequate level of coverage.

My thinking on this is that most insurance companies will gladly give you a policy worth between three and five times your current income. they figure that is a sufficient amount of money to bury you and get your family adjusted to their new financial situation.

my wife and i were skeptical about the 3-5xCurrent Income figure, but we did some calculations for ourself, and we figured that this was enough for us because that was suffiicent to pay-off the mortgage. because both of us work and we make the same amount of money, we looked at the budget that one of us workin alone could make ends meet without our partner's income if the mortgage was paid if (given that my wife and I both eat, and buy clothes, make car payments, etc, that cost money that wouldnt need to be shelled out in our demise).

if you are single, or you are the main wage-earner in your family, it might make sense for you to take out a larger policy. when we talked to life insurance agents about this, they said (they were salesmen so take this with a grain of salt) that if a case could be made for our taking out a larger policy, then the people who evaluated the policies could usually be persuaded to change the coverage limits. so, the 3-5x current income cap is not fixed.

if insurance companies are willing to give you as much coverage as you can make the case that you need, and it saves you money to get just one policy (which I believe to be true), then it doesnt make sense to me why someone who is 23 would take out multiple policies.

my advice would be to save your money, and 10 years from now when you have set-aside some of the money you've saved from insurance payments, you should take out a second policy (or amend the original one) to reflect your current income.

Answer 10

If you already have coverage in place, of course you can purchase an additional policy. If you don't already have coverage, don't purchase multiple policies, as each one will have its own policy expenses. Purchase one policy for the amount you need; and consider a guaranteed insurability rider to ensure you can increase coverage later regardless of your health.