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The short answer to this question is: yes, you can. However, the question of whether you can and indeed, should have multiple life insurance policy or critical illness policies also tends to be a little more complicated than a simple yes or no.

Is having more than one life insurance or critical illness policy actually a good idea?

As we referenced above, it is certainly possible to take out more than one life insurance or critical illness policy per person – there is no law prohibiting this.

Furthermore, there are certain very understandable reasons why you might wish to take out an additional life insurance policy – for example, if you wish to maximise the level of protection your surviving loved ones would benefit from in the event of you passing away.

Some people may also look to take out an additional life insurance policy if they have made lifestyle changes – such as quitting smoking – that could help them achieve more favourable premiums. But at the same time, they might like the idea of also keeping their old policy in place, for that little extra security.

Having multiple life insurance or critical illness policies in place could also mean more inheritance for your beneficiaries. For example, if you were to take out a second life insurance policy written ‘in trust’, the pay-outs from these life insurance policies would not count towards the inheritance tax threshold, set at £325,000 for an individual. Beneficiaries might be required to pay less inheritance tax as a result.

However, it’s also true that just because you can have more than one policy at a time, doesn’t necessarily mean you should. You might find that it’s easy to get your insurer to adapt your existing policy to whatever your needs may be. And if you were to do that, you would still have just the one policy to keep track of, which could help reduce complexity and confusion.

Are there any risks?

The largest risk with taking out any new life insurance or critical illness policy to add to your existing one, is a lack of guarantee regarding how much you will need to pay. Life insurance premiums are formulated around health information given at the time the policy is taken out, and circumstances can quickly change. So, just because you paid one rate with one policy in the past, doesn’t mean it would be the same for another that you might choose to take out now.

Ultimately, many people prefer to adapt a single existing policy to their current needs. Changes could include the length of the policy term, the amount of cover, and whether payments are made monthly or annually.

If you’re dissatisfied with your current arrangement, it could therefore be well worth trying to adapt it first, before you explore taking out any new, separate policy.

How many life insurance policies can I have?

Let’s go back to the beginning of our article: yes, you can have more than one life insurance or critical illness policy. But you might wonder, how many can I have? Is there a limit? The answer is no! Legally, you can have as many policies as you’d like. Just make sure you are aware of the difficulty and complexity of managing multiple policies before you make this choice.

Would you like to discuss your needs in relation to life insurance or critical illness cover with trusted advisers – for free, with no obligation to purchase? If so, please do not hesitate to call our own skilled and informed protection insurance experts now, on 0800 316 6917.

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