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Can you have more than one life insurance policy?

Technically you can have as many life insurance policies as you want or need, but there are few things you'll need to think about

A photo of Daniel Sharpe-Szunko, the author

By Daniel Sharpe-Szunko

Published on: 27 September 2023

5 min read

Can you have more than one life insurance policy?

Life insurance can seem quite complicated and complex, but in reality it’s actually quite simple. One of the common questions that people often ask is whether you can have more than one life insurance policy per person or household.

The answer is fairly simple, because technically you can have as many life insurance policies as you want or need. There are still a few points to consider if you’re thinking about taking multiple life insurance policies, Depending on the amount of cover and your reasons for cover.

In this quick guide, we’ll look at different types of life insurance and why you might want multiple policies, as well as some potential limits or restrictions. Generally, life insurance is a standalone policy and therefore there aren’t any specific restrictions unless they are imposed by the insurance provider themselves.

QUICK SUMMARY – Can you have more than one life insurance policy?

In theory you can have as many life insurance policies as you want, as long as you can justify the amount of cover you’ve got. All this does is protects the insurance providers against potential insurance fraud or money laundering.

  • Life insurance is a standalone product and is not linked to any specific credit agreement (e.g. Mortgages, secured loans, unsecured loans etc.)
  • There are several different types of life insurance that are designed for a specific purpose, and so it is natural to have multiple life insurance policies
  • You can also spread the risk across several different life insurance providers for greater certainty of pay out
  • It is possible to have multiple life insurance policies with the same insurance provider all to have numerous policies across multiple insurance providers
  • each life insurance provider has very specific underwriting criteria and financial limits to consider

In theory you can have an unlimited amount of life insurance policies with the same insurance provider or across multiple providers. There are no specific restrictions in place that suggests a maximum amount of life insurance policies that you can hold.

How many different types of life insurance are there?

There are several common types of life insurance policy that you will probably have heard of, such as:

These are some of the most common types of life insurance that are currently available in the UK for personal customers. There are also a number of all the types of life insurance that you may not have heard of which can be available to personal and business customers, including:

Why do some people have more than one life insurance policy?

The most common reason for people having more than one life insurance policy is where they want to protect more than one eventuality or element of risk. An example of this might be someone who has a policy to protect a mortgage (decreasing term life insurance) and a separate policy to protect their family (level term life insurance).

You might also have a separate policy which includes critical illness insurance as an extra element of cover. Some people also have a life insurance policy through their business or work, as well as a personal life insurance policy for their family.

This is why it is common and certainly reasonable for people to have more than one life insurance policy with the same or multiple insurers.

It also gives you the flexibility to be able to insure different amounts of cover on different terms of policies. You might also have different life insurance policies with a previous partner or wife and then a new policy with a new partner in the future.

Are there any restrictions to multiple life insurance policies?

Generally, the only restrictions that most life insurance providers would have in place would be on the amount of cover you are allowed to have overall. This is fairly reasonable and just means that somebody on an average income in a typical household would not be able to over insure themselves.

As long as the amount of cover seems reasonable then you should be able to take out as many life insurance policies as you need. The amount of cover that you choose to take out is entirely up to you on based on your own affordability and budget.

All this means is that at the point of claim, if it appears that there is a potential risk of insurance fraud or money laundering then questions may be asked.

Example of being over insured

Household income: £60,000

Property value: £350,000

Mortgage balance: £200,000

Children: 2

Partner: 1

Amount of life insurance: £4 Million

What is a reasonable amount of life insurance policies?

It is fairly reasonable and normal to expect for an individual or a family to have up to five separate life insurance policies. This can include older life insurance policies that have not been cancelled and new life insurance policy ‘s for remortgages etc.

A typical household might have something like the following life insurance:

  • Mortgage life insurance
  • Additional or top up mortgage life insurance
  • Family life insurance (individual or joint)
  • Life and critical illness cover (individual or joint)
  • Income protection insurance (individual or joint)

Can I have life insurance if I have death in service through my employer?

Absolutely, and this is also strongly recommended that you consider an individual life insurance policy as well as any death in service cover. There are a number of reasons for this but ultimately death in service is not specifically a life insurance policy.

Death in service is designed as an employee benefit to provide cover for families of members of staff in the event of death. These are not policies that are designed for specific reasons such as to protect a mortgage or provide family protection.

Most death and service policies will pay out a multiple of your annual salary, usually between three and five times. This would often be insufficient for most families who would require long term financial protection.

How to find out more about getting life insurance

if you have life insurance in place already that you wish to review or you want to look at new life insurance policies, then you should speak to a specialist. A discount life insurance expert will be able to give you free advice on what cover is available on the best way to structure your life insurance policies.

There are many different options and many different types of life insurance to consider, so by getting advice you can tailor your cover to your needs. A life insurance specialist should also be able to provide you with quotes from multiple insurance providers to get the cheapest and best cover.

If you need more information or free expert life insurance advice and you can contact one of our specialists on 0800 009 6559 or click here.

Resources

Finder.com – Life insurance statistics

Statista – Life insurance industry in the UK

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