Are you wondering whether it’s a good idea to have more than one life insurance policy? When it comes to the good things in life, it’s easy to think that having more of an already good thing is automatically better. Because what could possibly be better than one cookie? Two, right? (And bonus points if you also happen to have a glass of milk).
Well, when it comes to having more than one life insurance policy, the answer is – it depends. While most people assume that having one life insurance policy is enough, there are definitely situations where having more than one policy would be beneficial.
Let’s dive-in to the pros and cons of having multiple life insurance policies and why someone may need more than one.
- Increased Coverage: One of the primary benefits of having multiple life insurance policies through Quility is increased coverage. If you have one policy, the death benefit amount may not be enough to cover your family’s financial needs. However, having multiple policies can ensure that your loved ones receive sufficient funds to cover expenses such as mortgage payments, living expenses, education costs, and more.
- You Could Save Money: Another advantage of having multiple life insurance policies is that you may be able to save money on premiums. By combining coverages to find the exact right amount for each stage of life you won’t overpay for extra coverage you don’t need.
- Make it Custom: By having multiple life insurance policies, you’re diversifying your coverage and your payments. It allows you to have more coverage when you need it and less when you don’t, making your life insurance totally customizable through life’s stages.
- Complexity: Managing multiple policies can be complex and time-consuming. You’ll need to keep track of different premium payments, policy terms, and coverage amounts. Lucky for you, the pros at Quilty can make this super easy!
- Cost: While having multiple life insurance policies can save you money on premiums, it could also increase your overall insurance costs if you don’t work with a professional.
- Over-Insurance: Purchasing too much life insurance can lead to over-insurance, which means that you’re paying for more coverage than you actually need. If you have more coverage than necessary, you’re essentially wasting money on premiums. Reaching out to a Quility representative will make sure you tackle laddering flawlessly. What’s laddering? Well we’re glad you asked!
If you’re interested in purchasing multiple life insurance policies, our favorite approach is called “laddering.” This strategy involves buying multiple term life insurance policies with staggered term lengths and coverage amounts. For example, you could purchase a 10-year term life insurance policy with a $500,000 death benefit and a 20-year term life insurance policy with a $250,000 death benefit.
The idea behind laddering is to provide short-term and long-term coverage while keeping premiums affordable. When the shorter policy expires, you may be at a stage in life where you don’t need as much coverage, and the longer policy can continue to provide protection.
Laddering policies can help you secure more affordable rates, and this strategy is great for people who know they will need different amounts of coverage at different points in their life.
As you get older, it’s likely that you won’t have as many financial obligations – your children will get to the point where they are grown, and you may not need financial protection for a small business or outstanding debt that you once did before.
This means that you would only need life insurance coverage to cover a few expenses, such as your mortgage or medical bills, and having a smaller policy can bring large savings your way.
If you’re a small business owner, you may need multiple life insurance policies to protect your business and your family. For example, you could purchase a policy to protect your business in case of the death of a key employee. You could also purchase a buy-sell agreement life insurance policy to ensure that your business partners can buy your share of the business in case of your passing.
Another reason is with the purpose of covering final life expenses and/or funeral plans. If you have multiple policies, you can ensure that your loved ones have enough funds to cover these expenses.
Additionally, if you want to leave an inheritance to your loved ones, multiple life insurance policies can help you achieve that goal.
Having multiple life insurance policies can be a smart financial strategy for some people, but it’s not for everyone, which is why you need a life insurance professional to guide you through the process. While there are advantages to having multiple policies, such as increased coverage and lower premiums, there are also disadvantages, such as complexity and possibly increased costs.
It’s essential to weigh the pros and cons carefully before deciding whether to purchase multiple life insurance policies. Reach out to a Quility representative today and let us guide you through the decisions to find the perfect fit for you!
Ultimately, the most important thing is to have a life insurance policy that meets your needs and provides financial protection for your loved ones.
Whether that’s one policy or multiple policies, make sure to choose a reputable insurer and understand the terms and conditions of each policy. By doing so, you can have peace of mind knowing that your family’s financial future is protected, no matter what happens.
