The short answer is…Yes! You can certainly have multiple life insurance policies. Let’s take a look, at a few ways, as to why and how to properly structure multiple policies. First it is best to understand the different types of insurance that exists. Below, is a brief video description…. feel free to skip the video and continue reading the rest of this blog.
Regardless if you watched the video or not, let’s dive into a practical example of layering policies. Knowing that term policies will eventually terminate it is best to have a permanent, whole life insurance policy that will be there for your family if you outlive your term policy.
The term policy will be able to cover the insured, as long as the policy is in force. Typically, those policies will last for 10, 20 or 30 years. (Although, sometimes policies increase every year and become quickly unaffordable. It is best to do a policy review with a licensed agent to fully understand your policy.) While a term policy is great to have, just know eventually it will be gone. Typically, once a term policy expires the amount of coverage the insured needs is drastically less(we will take a look at why in just a moment). Adding a smaller, whole life policy to your current portfolio will ensure that no matter when you die there will be a check that goes to your beneficiary. So let me answer this question: Why will the amount of insurance I need be less when I’m older?
Most folks owe less or nothing at all on their house when they are retired. Also, if there were kids living in the house, it is not uncommon to be “empty nesters”. Therefore, the overall living expenses, such as food, utilities, clothing….Let’s just say when you die, your financial responsibility is typically way less. That’s why many people find peace of mind having a permanent whole life insurance policy.
A whole life insurance policy will never expire. The amount you pay never goes up and the amount of coverage that you have never decreases. The policy never expires as long as you maintain your premium payments. Most people use these policies to cover a funeral, burial, cremation or to leave money behind as a gift. If you would like to learn more about this type of policy you can check out the video by clicking the link below.