Guides

How many life insurance policies can you have?

7 minutes

This content was reviewed and approved by Geoff Eaton and Fiona Robson.

There is no legal limit to the number of life insurance policies you can have in the UK. In some circumstances, it may be an advantage to have multiple life cover plans in place.

If you’ve asked yourself ‘how many life insurance policies can I have?’, this guide will highlight the pros of cons of owning more than one policy and when this might be right for you.

The information on this page should not be considered as financial advice. If you are unsure what’s right for you, please make sure you speak to a financial adviser. 

What is life insurance?

Before we continue, it’s important to understand how life insurance works. Life insurance is a contract between you and your insurance provider. You’ll pay a monthly premium in exchange for a guaranteed lump sum payment to your beneficiaries if you die within the term of the policy.

There are many different types of life insurance and which is best for you depends on your specific needs and circumstances such as your age and health. If your situation changes you may consider taking out multiple life insurance policies to provide additional cover or add-on benefits such as critical illness cover.

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How many life insurance policies can I have? 

You can take out as many life insurance policies as you wish. While there’s no legal limit, there’s no optimum number either. The main function of life insurance is to provide the financial cover you need at a price you can afford, whether that’s with one policy or several types. 

If you already have life insurance, you may be able to top it up with additional cover from your current provider, possibly with preferential terms, depending on the flexibility of your live policy.  

Alternatively, you may prefer to purchase different types of life insurance from different providers. Because life insurance premiums can increase with age, it may be beneficial to shop around for the extra cover you need. 

When might I take out more than one life insurance policy?  

People take out more than one life insurance policy for many reasons. For instance, your circumstances may have changed since you bought your very first life insurance policy and you now require additional policies to meet your evolving needs. 

Some common reasons for taking out more than one life insurance policy include: 

1. Additional cover  

You were younger when you took out your first life insurance policy and now require additional cover to reflect your current lifestyle. If you can’t do this with your provider, you may have to buy another policy. 

2. Family changes 

Marrying your partner, having a new baby, or going through a divorce may prompt you to buy more than one life insurance policy. As your circumstances change, you may require additional cover to provide sufficient financial protection for your growing family should you pass away.  

It’s also worth checking your existing policy as your insurer may provide an option to increase your cover based on the life changes above, subject to certain limits. 

3. Bigger mortgage  

As you get older you may have new or larger financial commitments. If you move to a bigger house, or start a family, your existing life insurance policy may not provide the cover you require and you may consider an additional or replacement policy.

It’s also worth checking your existing policy as your insurer may provide an option to increase your cover to match your new mortgage, subject to certain limits. 

4. Greater flexibility  

You require enhanced flexibility from your policy to cover your changing circumstances. For example, you may have mortgage life insurance that will pay off your mortgage debt should you pass away alongside a separate policy that covers your children growing up. 

5. Separate cover 

Your circumstances dictate that you and your partner would benefit more from two single policies than joint life insurance. 

6. Lifestyle changes 

You’ve changed your lifestyle habits (by quitting smoking, for example) and you want to shop around to look for cheaper cover that reflects your newfound status and provides the financial protection you require. 

7. More beneficiaries 

If your family situation has changed, you may want to add additional beneficiaries to your policy, however, if your policy is written in trust you may not be able to add additional beneficiaries to your policy. 

8. Limited work cover 

If your employer offers death in service cover, you’ll need to decide if the payout would provide the beneficiaries you have chosen with what they need. If not, having your own life insurance policy could be beneficial. 

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Will I receive a payout from each life insurance policy? 

Yes, insurance providers typically honour payouts from each active life insurance policy. However, while there’s no limit to the number of policies you can have, providers may cap the total amount of life insurance you can take out. 

It’s important to remember that each life insurance policy is separate. You’ll make separate monthly payments for each one, even if they’re with the same provider, and you’ll pay more in premiums overall. 

Life insurance providers may also refuse to pay out if they find discrepancies or omissions in your medical history. Therefore, it’s crucial to be honest and transparent with your insurer and update them on any changes to your health or lifestyle so your policy remains valid. 

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Should I take out multiple life insurance policies? 

That depends on whether you already have enough cover in place. If one life insurance policy meets your financial needs, you won’t need to buy additional cover. However, if your circumstances change, you may want to look for additional cover. For example, when you want to cover new dependents. 

If you need to boost your cover and you already have a life insurance policy, your current insurer may be able to help, either by tweaking your existing policy so it stretches to cover your additional needs, or by setting up a new policy to run alongside it. 

If you’re thinking of taking out more than one life insurance policy, you could consider the following options:  

Pros

Cons
  • Two different types of policy match your needs better than a single policy. For example, a level term policy may provide for your chosen beneficiaries when you die. But you may also take out decreasing life insurance to cover your capital and repayment mortgage debts. 
  • If you need life insurance that exceeds a policy’s maximum payout threshold, you may consider multiple policies from different insurance providers. 
  • You need additional cover but can’t change your existing policy. A further policy could provide what you need. 
  • You could take out multiple policies ‘in trust’ and avoid or reduce the inheritance tax due on any lump sum payouts.  
  • The more cover you have, the higher your premiums will be, and the more expensive it is to pay for premiums on policies you may not need.  
  • Keeping track of multiple policies can be challenging, especially if your circumstances change and you need to update your cover. 
  • You may find the cost and terms of any additional policies are not as favourable as your original policy, possibly because of your age or health status.  
  • A maximum payout threshold may apply if you have multiple policies with the same insurance provider.               
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Can couples have more than one life insurance policy? 

Yes, couples can take out multiple joint life insurance policies. Each policy will pay out once when one or both of you pass away. 

If you’re in a relationship or have a business partner, joint life cover could be an option. You’ll receive a lump sum payout when the first partner dies, the policy will end, and the surviving partner is left without any cover. 

While joint life insurance has many benefits, you and your partner may prefer to take out two individual policies. This can be an advantage should you split up as you won’t need to get new cover to suit your circumstances. Also, two separate policies will provide your loved ones with two payouts should you both die. 

Most joint policies are more affordable than two single policies. But a joint policy only pays out once, whereas single policies offer greater flexibility and continue to provide coverage after one partner dies. 

Do you need further advice regarding how many life insurance policies you can have? 

If you’re considering increasing your life insurance cover, adjusting your current plan, or taking out another policy, contact LV= today. You can also find out how much life insurance cover you and your partner may need by using widely available online life insurance cover calculators, before requesting a quote.