HomeAnswersCan you have two life insurance policies?
Can you have two life insurance policies?
Yes, a person can have more than one life insurance policy, and state insurance regulators describe people adding coverage over time. The Texas Department of Insurance mentions buying an additional whole life policy as income grows, South Carolina's insurance department says cash value and term coverage can be combined, and Washington's insurance commissioner describes term insurance as a way to supplement an existing whole life policy.
Existing coverage does come up when you apply. Vermont's replacement regulation requires a statement signed by the applicant and the agent saying whether the applicant has existing policies, and California's insurance department says agents have a duty to ask about your current coverage. Insurers also decide how much they will issue. California's insurance department notes that a person has only a finite amount of insurance capacity and that insurers often decline to write more when substantial coverage already exists on that life. The NAIC says policies can be taken out by spouses or anyone who can prove an insurable interest in the person insured.
Adding a policy is different from replacing one. Vermont's required notice says a replacement occurs when a new policy is bought and, in connection with the sale, the existing policy stops being paid or is surrendered, forfeited, or otherwise terminated. Washington's insurance commissioner says consumers there must receive a replacement notice by law when trading in policies, and advises never dropping an old policy until the new one takes effect and has been reviewed.
The sources behind this answer
- The Texas Department of Insurance describes buying a whole life policy with a term rider and, as income grows, buying an additional whole life policy. Texas Department of Insurance
- The South Carolina Department of Insurance says cash value life insurance may be combined with term insurance for the period of greatest need. South Carolina Department of Insurance
- Washington's Office of the Insurance Commissioner says term insurance can bridge a gap in group coverage between jobs and can supplement an existing whole life policy with additional coverage. Washington Office of the Insurance Commissioner
- Vermont's Life Insurance and Annuities Replacement regulation (Reg. I-2001-03) requires the agent who initiates an application to submit a statement signed by the applicant and the agent saying whether the applicant has existing policies or contracts. Vermont Department of Financial Regulation
- The California Department of Insurance says agents have a duty to inquire about a consumer's current coverage. California Department of Insurance
- The California Department of Insurance says a person has only a finite amount of insurance capacity and insurers often decline to write additional insurance if substantial insurance already exists on that life. California Department of Insurance
- The NAIC says most policies are bought by the person whose life is insured, but policies can be taken out by spouses or anyone who can prove an insurable interest in the person. NAIC
- Vermont's required replacement notice says a replacement occurs when a new policy is purchased and, in connection with the sale, premium payments on the existing policy stop or the existing policy is surrendered, forfeited, assigned to the replacing insurer, or otherwise terminated or used in a financed purchase. Vermont Department of Financial Regulation
- Washington's Office of the Insurance Commissioner says consumers should never drop an old policy until the new one takes effect and has been reviewed, and that in Washington a consumer trading in policies must by law receive a replacement notice. Washington Office of the Insurance Commissioner
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