Secondary life insurance

As your life changes, you may want additional life insurance coverage. There are no laws restricting how many policies you can own, but insurance companies may decline you if they believe you are over-insured.

Father in army jacket embracing daughter.

Can you have more than one life insurance policy?

There are a lot of good reasons to have more than one life insurance policy. Your financial needs will change during the course of your life, and when they do, your life insurance needs will likely change as well. Adding a policy when you get married, have a child, buy a home, or start a business is more common than you think, and it is a sound way to protect the people you care about.

There’s no limit to how many policies you can own, but it is still possible to apply for too much life insurance. The total amount of benefits is what insurers will look at when they decide whether to offer a second (or third) life insurance policy. Whatever your goals are, the best thing to do is to research your options and speak with a trusted financial professional.

Related: Compare life insurance


Can you have life insurance policies with different companies?

Yes. However, be aware that applying for multiple life insurance policies in the same time frame may result in you being denied coverage. Life insurance providers share information with each other through the Medical Information Bureau, and it could look as if you’re trying to get more insurance than you actually need, even if you’re just shopping around. It’s best to work with an insurance agent to help find the right mix of products to meet your needs and to avoid frustrating delays.


Can the same beneficiary be designated on more than one policy?

Yes. You are not restricted on whom you can declare a beneficiary. You can split your benefit up however you desire among as many people, charities, and organizations as you like. You can even choose backup or “contingent” beneficiaries to receive funds should your primary beneficiary be unable to do so.


What is the difference between supplemental and secondary insurance?

Supplemental insurance generally refers to non-life insurance policies that help out in specific instances. They can help you protect your lifestyle while you are still alive. Secondary life insurance policies are when you purchase additional life insurance to provide more insurance benefits to your beneficiaries when you pass.


Alternatives to multiple policies

If you need more coverage, you’ll want to make sure you’re choosing the right mix of products. Instead of getting a new policy, you could change an existing one, but you’ll only know which is best after you explore all your options.


These are common “add-ons” to your existing life insurance policy that can customize it. Riders, some at additional cost, can enhance the benefit you can receive. Note, many riders must be added at issue so speak to your agent if you have any questions about adding riders to your existing policy. 

Increasing coverage

You often need a reason to increase the insurance benefit of an existing life insurance. Many life events qualify, like having a child, buying a home, or taking out a loan to start a business. Increasing coverage will increase the premium you pay, and you may be required to take another medical exam to update the medical underwriting of the policy.


Why would I want a secondary life insurance?

Everyone’s situation is unique, and the reasons for adding life insurance coverage are varied. Here are a few of the common scenarios that motivate smart individuals to rethink their total life insurance benefits.


Work-provided coverage is insufficient

Many employers offer a group life policy as a benefit, either for free or for a small monthly payment. It’s a great option, but it may not provide as much coverage as you’d like. Adding a small individual whole life insurance policy can help further protect your family after you’re gone.


Major life changes

Getting married, having a child, or starting a new job can all trigger important life changes and make you rethink your financial future and the safety of your family. During these moments, it’s important to check your life insurance policy to make sure it still meets your changing needs. If it does not, adding a policy can be a smart option to bring your coverage back in line.


Covering financial decisions and risks

A secondary life insurance policy can help ensure safety when you take on new debt or risks. For example, if you buy a house, you may want to add a 15-year term life policy that will cover the mortgage. That way, your family will not have to worry about selling or moving out of the home if they are unable to keep up with monthly payments should you pass.


Predicting lower needs over time

It’s fairly common to need a larger amount of term life insurance for a time, like when a child is young, and need less as you get older. Some people buy a short-term policy, and then purchase a smaller one when it expires, but that can lead to issues. You could have a health event in between purchasing policies that makes your premiums go up significantly, or even makes you uninsurable. To deal with this situation, many people use a strategy called “laddering.”

Instead of waiting to buy a new policy until after the first one ends, you can buy multiple term life policies at the same time for varying lengths and amounts. This laddering approach locks in your insurability over the long term while still letting your coverage drop over time.

Example: You just had a child and want a policy to ensure your family’s financial stability while the child is young. As the child grows older, however, your family won’t need as much. You can purchase:

  •  A $300,000 policy for a 10-year term
  • A $200,000 policy for a 20-year term        

That means your beneficiary will be covered for the combined amount, $500,000 during the first 10 years, and $200,000 after that. This laddering approach can save you a lot of money over time.

Life insurance is an important part of any financial strategy. Whether you’re looking for your first policy, or extra coverage, our agents can run through all the options and help choose and customize a policy that precisely meets your needs.

Related: Connect with an agent 

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