Helping to protect your loved ones financially in the event of your death is a responsible and compassionate thing to do. Many people therefore consider; can I get multiple life insurance policies?
We outline what the rules are on multiple life insurance policies and why they may or may not work for you. Post Office Life Insurance has a variety of options which might be what you’re looking for.
Yes. There’s no law against taking out as many life insurance policies as you want in the UK. Just remember to read any policy agreement carefully. While there isn’t any law against multiple policies, insurers may have a maximum total cover, so you wouldn’t be able to keep taking out new policies for an increasingly high payout.
You are entitled to take out policies with different providers, but again, providers may limit the amount of cover you can get.
It depends on your situation and goals for your life insurance. If you have a life insurance policy that no longer fits your needs, you can explore an additional policy or look at increasing your existing cover.
We can’t legally advise you on what to choose, but we can talk you through all your options so you can make the best possible decision.
Let’s say you have a life insurance policy for £150,000 of cover. Perhaps you have another child or move to a house with a bigger mortgage. You decide you want to double the amount of cover to £300,000, so look at opening a second policy and paying two monthly premiums.
This is possible, but you could instead just update your policy to include more cover. There isn’t any advantage of having a second policy instead of a policy with greater cover. If you reach out to your insurer, they should be able to update your policy to the level of cover you want (providing it’s within their limits).
It can be beneficial to take out a second policy if you’re looking for a different type of life insurance.
For example, if you have a mortgage, you might have set up a policy with decreasing cover. This type of insurance offers lower monthly premiums than other policies, as the value of your payout reduces over time. As time goes on and you pay off more of your mortgage, the amount you need to leave behind to support your loved ones decreases, so you’re only paying for cover that you need.
However, you might reach a point where you want to not only cover the mortgage but also leave a financial gift behind for your family. You might want to leave some funds to help them find their feet after you’ve gone. Maybe you want your kids to have it as a deposit for a first place of their own.
In this scenario, it might make sense for you to keep your decreasing cover policy but also take out a ‘level cover’ policy. This means that a lump sum is ringfenced, while your other policy takes care of the mortgage.
As we mentioned earlier, it’s important to remember that most insurers have maximum total cover, so if you have more than one policy, your payouts will still need to fall below this number.
If you’re not sure what would be best for you, don’t hesitate to get in touch with us. One of our team can explain the different types of cover available to you, whether you have an existing policy with us or not.
Yes, you can take out multiple life insurance policies with different providers if you want to. You might decide that you want additional or varying cover and another provider is offering exactly what you need.
However, be sure to check the policy wording of both providers. Some insurers don’t issue policies if you already have cover for up to a certain value. If you were to have an average salary but multiple policies totalling £5 million in cover, for example, it could raise suspicion. As we all know, death sadly isn’t always unplanned. Insurers will want to feel confident that policies align with genuine financial needs.
Knowing how much cover you need is a tricky thing to estimate. No one wants to leave their loved ones short, but you also want to avoid costly monthly premiums for an unnecessarily high level of cover.
That’s why we created a life insurance calculator. The calculator will ask you a few simple questions about your financial situation, such as income, savings, debts and more. It then provides you with a projection of how much cover you might need to suit your goals.
Most life insurance policies cover a fixed term, so if you don’t make a claim within that period, there won’t be a payout after you pass away or become critically injured.
However, if you want to make sure that you leave something behind, you can also get ‘whole-of-life’ cover, which will pay out no matter how long you live.
Whole-of-life cover is often for people entering their later years, and at Post Office we call it Over 50s Life Cover. Payouts are usually smaller, with our Over 50s Life Cover having a £10,000 upper limit, depending on age. However, it ensures your loved ones are left with a gift, helping them to pay for funeral costs or celebrate your life in their own way.
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