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When it comes to purchasing life insurance, having sufficient coverage is one of the biggest concerns for an individual. It is possible for a single individual to obtain coverage from more than one life insurance policy. Multiple policies can be provided by different life insurance companies, or from the same company. There is no problem with how many policies a person has, but what factors in is the total amount of coverage when compared to her assets, income, and other financial responsibilities.
The only limitation to having more than one life insurance plan appears in terms of the premiums. As long as an individual can afford to pay the rates for the coverage, that person may purchase as many policies as she would like. However, it is crucial for the individual seeking insurance to evaluate the situation before purchasing coverage from more than one policy, in order to make sure that the coverage will be an asset rather than an undue burden. Should a problem arise that prevents someone from being able to afford making payments on one or all of their life insurance premiums, it could lead to extreme financial difficulty. The end result could be complete termination of all coverage. It is crucial for people to factor in the cost of any life insurance premiums into their household budget in order to make sure that these expenses can be realistically handled.
Sometimes insurers will offer a policy that only covers the insured up to a certain amount. If such is the case, and the insured wishes to have additional coverage, it is possible to acquire a second life insurance plan. Typically, most insurance companies will want to know if the applicant already has another life insurance policy in place. That query will be part of the application process for coverage. An insurance company will likely be interested to learn why an individual should wish to obtain coverage from more than one life insurance policy.
In order for someone to make an informed decision about whether or not they would benefit from coverage from two different life insurance policies, she should have a better understanding of the kinds of policies available to her. In general, there are two different types of life insurance to choose from. These are term life insurance or permanent life insurance.
With term life insurance, the individual purchasing the policy must indicate the length- or term-of the coverage. At the start of the policy, when the person covered is younger, the premiums are their lowest. They increase as the age of the insured person increases. With this type of insurance, payouts will only be made to beneficiaries should the insured pass away within the terms specified. Should the insured individual outlive the coverage, the policy will simply expire with no payout made.
Permanent life insurance coverage provides coverage throughout the entire life-span of the insured party, and so the premiums tend to be higher than that of term life insurance coverage. There are four basic options when it comes to permanent life insurance, universal life, complete life, restricted pay, and endowment.
When purchasing more than one life insurance plan, it is important to thoroughly research the restrictions and limitations of each and every policy that is being considered. Some policies reduce their payout amount or will not pay out anything at all to beneficiaries should there happen to be other policies in place. That is why extreme caution should be exercised by anyone looking to secure additional coverage by purchasing more than one life insurance plan. Should it be decided that additional coverage is necessary, and a single life insurance policy is not enough, the insured individual will benefit from doing as much research as she is able before purchasing a second policy.