Is it legal to have multiple life insurance policies?

With so many financial responsibilities in today’s world, we’re commonly asked whether or not it’s legal to take out more than one life insurance policy.

The answer is, yes, absolutely.

Unlike other insurance policies, such as car or home, it’s possible to secure multiple life insurance policies simultaneously.

In fact, layering your life insurance can allow you to cover different financial responsibilities more effectively. For example your:

  • Children
  • Spouse
  • Mortgage
  • Income/salary
  • Family living costs
  • Inheritance
  • Funeral costs

When taking out multiple policies it’s essential to compare quotes to ensure you’re securing the best available deal.

At Reassured we can help you save time and money by comparing quotes, (without charging a fee).

Now we have answered 'can you have more than one life insurance policy', let’s look at all the other key considerations with regards to this setup…

Can you have more than one life insurance policy?

How many life insurance policies can I have?

In the UK there’s no specified limit on the amount of life insurance policies you can hold.

You’ll be able to secure as many policies as is necessary to cover all of your financial obligations.

While there aren’t any laws regarding the number of policies that you can have, you often won’t be approved by insurers to take out more cover than is deemed required.

How much life insurance do you need?

Enter your financial commitments to understand the level of life insurance cover you require.

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£121,687 is the estimated average outstanding mortgage per household in the UK.

Our property is generally the largest financial commitment any of us will make.

Your life insurance should cover this significant debt should you no longer be around.
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According to Money Advice Service, full-time childcare in the UK now costs £242 a week.

The loss of a parent could result in the need for additional childcare whilst the surviving parent increases their hours to account for lost income.

Your life insurance cover should factor in this additional required outgoing.
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The average level of debt (minus a mortgage) in the UK is £15,385.

Factoring in any outstanding debts in your name when arranging life insurance ensures this burden is not passed to loved ones.
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You may wish to leave your loved ones an inheritance or lump sum gift upon your passing.

Factoring in the gift amount when arranging your cover will ensure the pay out amount will be sufficient to provide your loved ones with this selfless gesture.
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According to SunLife, the average cost of a UK funeral is now £4,417, whilst the total cost of dying is £9,493.

This is a 130% increase over the past 16 years and shows no signs of slowing down.

A significant cost which should be factored into the amount of life insurance you secure.
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If you are one of the 65% of the UK who are lucky enough to have savings, this could be used as protection if you were to pass away.

Any pay outs from existing life insurance policies, work-placed benefits and investments can also be used as financial protection for your loved ones if you were no longer around.

Factor this into your required cover amount.
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Your total cover estimate

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Why would I want multiple life insurance policies?

Whether having multiple life insurance policies is right for you will ultimately depend on your individual needs, budget and circumstances.

You may want more than one life insurance policy if:

  • Your circumstances have changed
    If you’ve got an existing policy and your circumstances change (for example, your family grows or you move to a bigger house), having multiple policies can help you to increase your level of cover to fit your new circumstances
  • You and your partner want to maximize your cover amount
    By taking out two life insurance policies (rather than a joint policy), as a couple, you can secure a greater level of cover and ensure you have a more comprehensive life insurance solution
  • You’re a business owner
    As a business owner, it’s important to have enough cover for both personal and business aspects of your life. Any of the policies outlined in this article could be taken out for personal cover. For business aspects, you may wish to take out a joint life insurance with a business partner or a specific business life insurance policy, such as key man insurance, (not something we currently offer at Reassured)
  • You have limited cover through your employer
    Some employers offer group life insurance as an employee benefit. This is often in the form of death in service benefit. Often the amount paid out by employers won’t be sufficient to meet your needs and if you leave your job the benefit can’t be moved between companies. For this reason, you may choose to layer your own personal cover with your death in service benefit to make sure your loved ones are comprehensively protected

Seeking the help of an experienced life insurance broker can help you to gather all the information you need to establish whether having multiple policies is the right option.

Get in touch with a friendly member of our team so you can make a fully informed decision.

Types of life insurance policies

There are multiple life insurance policy options, each better suitable for covering different aspects of your life, these include:

As each policy type can be used to cover different financial obligations you may choose to layer more than one policy.

You may also choose to layer a life insurance policy with other types of financial cover such as:

Let’s look into these policy types in a bit more detail and how they can be layered…

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Term life insurance

  • Provides cover for a specified period of time (up to 40 years)
  • Sum assured up to £1,000,000
  • Provides a cash lump sum pay out
  • Affordable premiums from 20p-a-day
  • Level and decreasing term policy options
  • Terminal illness cover included as standard

Term life insurance provides cover for a specified period of time (the term), this can be up to 40 years.

Term life insurance typically comes with level or decreasing term options.

Level term life insurance provides a fixed sum assured (cover amount) and is well suited to covering large debts (such as an interest-only mortgage), as well as family living costs, funeral costs and leaving an inheritance.

With decreasing term life insurance, your sum assured will reduce throughout the lifetime of the policy.

This makes it an ideal option for covering a repayment mortgage as you can have your sum assured reduce in line with your remaining mortgage balance.

With term life insurance it’s not necessarily a case of one or the other, both policy options could be taken out simultaneously to provide a comprehensive life insurance solution.

A level term policy could be used to cover family living costs and funeral costs, while the decreasing term policy could cover your mortgage.

At Reassured we can compare both level term vs decreasing term policies from some of the UK's leading providers.

Simply get in touch with a member of our friendly team to find a solution that meets all of your needs.

Whole of life insurance

  • Cover lasts for life
  • Guarantees loved ones a pay out
  • Fixed sum assured up to £1,000,000
  • Greater sum assured than over 50s plans
  • Medical questions during application
  • Affordable cover from 27p-a-day*

Whole of life insurance is actually a form of life assurance as cover lasts for life and guarantees (or assures) your loved ones a pay out.

You’ll need to pay premiums for the rest of your life to keep your cover in place, for this reason, it’s well suited to those who’re later in life and still in good health.

Those taking out this policy type at a young age may end up paying more in premiums than the policy will pay out.

A pay out from whole of life insurance is ideal for providing your loved ones with an inheritance and ensuring they have enough funds to cover the cost of your funeral.

Depending on your budget, a whole of life insurance policy could be layered with a term life insurance policy.

If you currently have a term life insurance policy in place, a whole of life policy could be taken out later on in life to guarantee your loved ones an inheritance and cover the cost of your funeral.

Why not use our award-winning broker service to compare whole of life insurance to find the most cost-effective solution?

Over 50 plans

  • Acceptance for UK residents aged 50 - 85
  • No medical exam or questions
  • Guarantees loved ones a pay out
  • Sum assured up to £25,000
  • Fast and simple application process
  • Affordable premiums from 20p-a-day

An over 50s plan guarantees acceptance to those over aged 50 - 85, with no need to provide any medical information.

Once cover is in place, you’ll be covered for the remainder of your life and your loved ones will be guaranteed a pay out.

It’s likely that a ‘waiting period’ will be added to your policy to compensate for the unknown risk you pose.

This refers to the first 12 or 24 months of your policy (depending on the insurer) where if you pass away due to natural causes, no pay out will be made to your loved ones.

However, any premiums paid during this initial period will be refunded to your loved ones.

An over 50s plan could be useful to layer with an existing life insurance policy if you find yourself needing more cover later on in life, perhaps to cover rising funeral costs for your loved ones, but have less than favourable health.

Compare multiple over 50s life insurance using our award-winning broker service.

Family income benefit

  • Provides cover for a specified period of time
  • Ideal for family budgeting
  • Monthly tax-free payments (up to £5,000 a month)
  • Term length up to 40 years
  • Affordable monthly premiums

Family income benefit differs from traditional life insurance as your loved ones will receive monthly income payments rather than a lump sum.

This makes it a great option for helping with long-term family budgeting and/or replacing a lost income.

Payments will commence from the day you pass away until the end of your policy term.

Family income benefit can be a good option to layer with other policy types, such as term life insurance.

A term life insurance policy could be taken out to cover your mortgage, while family income benefit can be taken out with the purpose to cover future family living costs if the worst were to happen to you.

Critical illness cover

  • Can be added to most life insurance policies for an additional cost
  • Cover if diagnosed with a serious illness
  • Provides financial protection for over 30 critical illnesses
  • Available up to age 70 (depending on the provider)
  • Provides tax-free lump sum

Critical illness cover is a policy that is typically added to a life insurance policy, for an additional cost, to provide an additional layer of protection.

It will allow you to make an early claim on your life insurance policy if you’re diagnosed with a serious illness, (that’s listed within your policy).

You can then use your pay out to fund:

  • Cover living costs whilst you're unable to work
  • Private medical treatment
  • Necessary adaptions to your home
  • Fees for carers

Once you’ve made a claim your life insurance policy will then expire.

You may choose to layer a life insurance policy with critical illness cover with another life insurance policy to provide additional cover if you needed to make a claim on your critical illness policy.

Save time and money by letting Reassured compare life insurance with critical illness cover from some of the UK’s best life insurance providers.

Can you have more than one critical illness policy?

Yes, just as you can have multiple life insurance policies, you can also have more than one critical illness policy.

Income protection insurance

  • Protect your income if unable to work due to accident or sickness
  • Pays out up to 70% of your income
  • Monthly tax-free payments
  • Short-term and long-term options available
  • Affordable cover from 20p-a-day**

Income protection insurance can pay out up to 70% of your income if you’re unable to work due to accident or sickness.

Cover can be taken out on a short-term or long-term basis.

With short-term income protection, your payment period can be up to 2 years, whereas with a long-term policy you can choose to be covered up until retirement.

Rather than a lump sum, you’ll receive monthly tax-free instalments which can help to cover financial commitments that your salary would normally cover.

This could be mortgage or rental payments, family living costs, bills and utilities, as well as cover any debts such as credit cards or loans.

An income protection policy can be layered with life insurance to provide an all-encompassing solution.

Income protection can cover your financial commitments should you become unable to work and life insurance can provide a lump sum to your loved ones if the worst were to happen.

Compare income protection quotes from all UK’s providers with Reassured Advice to find the best deal.

Funeral plan

  • Lock-in today's rate, (avoid future price rises)
  • Plan your funeral in advance
  • Guaranteed acceptance (no medical questions)
  • Flexible payment terms
  • Prices from £19.11^ a month

A funeral plan guarantees acceptance for all applicants, with no need to provide medical information, and offers you the chance to plan and pay for your funeral in advance.

There are a variety of plans that can be taken out with flexible payment terms, allowing you to pay in full or in affordable monthly instalments. Payment plans over 12 months will incur instalment charges and must be paid off by your 80th birthday).

While life insurance can be used to pay for your funeral, it won’t lock in the price for the essential services needed.

A funeral plan allows you to lock in today’s prices, which is extremely beneficial as funeral prices have risen 128% over the last 16 years and show no signs of slowing down[1].

Taking out both a life insurance policy and funeral plan simultaneously means that your loved ones won’t have to worry about finding the funds to pay for your funeral, and won’t have the emotional worry of having to decide your send-off options.

The lump sum provided by life insurance can help your loved ones to cover other essential expenses, such as mortgage or rental payments, as well as daily family living costs.

If you require a more comprehensive summary on the merits of life insurance vs funeral plan see our in-depth article.

Compare Multiple Life Insurance Policies »

How much does having multiple policies cost?

When taking out multiple policies you’ll be required to pay separate premiums for each policy as each policy exists in its own right.

How much you pay will depend on certain factors, including:

  • Your age
  • Your health and wellbeing
  • Your smoking status
  • Policy type
  • Length of policy
  • Level of cover (sum assured)

The table below shows example pricing for each life insurance policy type.

When taking out multiple life insurance policies, the total price you pay will be the sum of all the premiums combined.

Quotes are based on a non-smoker in good health, for £100,000 of cover over a 20-year term (for decreasing and level, whole of life has no term):

AgeLevel termDecreasingWhole of life
20£4.04£4.45£61.21
25£4.99£4.93£65.15
30£5.17£4.99£71.55
35£6.12£5.05£83.74
40£8.03£6.14£101.96
45£11.71£8.31£125.54
50£17.80£11.70£148.76


Quickly and easily compare multiple quotes using our award-winning broker service.

Do multiple policies need to be purchased at the same time?

No, you don’t need to purchase multiple policies at the same time.

It’s likely that your need for each policy type will develop at a different time in your life, therefore if won’t make sense to pay for levels of cover which aren’t necessary at the time.

For example, you may take out affordable decreasing term cover when you purchase your first property.

A few years later you may start a family, which would require more cover to protect family living costs if you were to pass away, so you may take out a level term policy.

However, some insurers offer discounts when multiple policies are purchased at the same time.

So, if you already have a family and are about to buy your first house you may want to take out level term and decreasing term life insurance simultaneously to protect both your mortgage and your family.

Speaking to a life insurance expert can help you to determine your best solution at the best price, why not let Reassured compare quotes?

Can I have multiple policies with different providers?

Yes, you don’t need to purchase multiple policies from the same provider.

Although some providers may offer discounts when taking out more than one policy at the same time.

When taking out family life insurance it’s essential to compare quotes from different providers to ensure you’re getting the best deal.

Just because you have an existing policy with a certain provider, doesn’t mean that they will offer the best deal in the future.

It’s also important to be aware that if you have multiple policies with multiple providers, multiple claims may need to be made by your loved ones after you’ve passed away, so it’s important to make them aware of the details of all policies you hold.

Can I claim on more than one life insurance policy?

Yes, just as it’s possible to have multiple policies in place, it’s also possible to claim multiple pay outs.

If you’re the beneficiary of multiple life insurance policies, you’ll be able to claim on each individual policy.

You may be asked to complete multiple claims forms, in which you’ll need to provide the details for each policy.

If all the information supplied during the application process is deemed fully disclosed, payments are up to date, and the cover has not expired, then each policy will be deemed valid and the pay outs will be issued.

However, if any information is deemed to have been falsified on a particular policy then the policy will be invalid.

This can lead to the pay out of that particular policy being denied, although this shouldn’t affect the other policies.

Should a couple have more than one life insurance policy?

For many couples securing a joint life insurance policy can be tempting, this is because you can save up to 25% compared to two separate policies.

A joint policy covers two lives simultaneously, so there’s one premium to pay between both parties.

However, there’s also only one life insurance pay out which will usually happen after the first death.

This leaves the remaining partner uncovered and needing to secure a new policy later in life, which can lead to higher premiums due to older age.

With a joint policy, if either party has less than favourable health, smokes or is deemed high risk for a particular reason, you’ll both experience inflated premiums.

Although having two single policies can be more expensive, it can provide a more comprehensive solution by providing two separate pay outs.

And if one is deemed higher risk than the other, only the person deemed as high risk will need to pay higher premiums.

Alternatively, if within your budget, it’s possible to secure both a joint life insurance policy with your partner well as single policies to protect each individual life.

This way your joint assets will be protected but you’ll also have your own cover if anything were to ever happen, (for example, if you were to get a divorce).

The table below shows a price comparison between a joint level term policy and two single policies.

These quotes are based on a non-smoker in good health, securing £100,000 of cover over a 20-year term:

AgeJoint policyTwo single policies% Saving
20£6.27£8.08-29%
25£7.04£9.98-42%
30£8.26£10.34-25%
35£10.70£12.24-14%
40£14.59£16.06-10%
45£21.30£23.42-10%
50£34.97£35.60-2%


Why not use our award-winning broker service to compare both joint policies and single policies to find your best option?

What happens if you have more than one life insurance policy?

Having more than one life insurance policy in place doesn’t affect the terms of cover for each policy as each policy exists in its own right.

You’ll make monthly payments on each policy and, if term-based, each policy will expire at its own rate.

You’ll need to continue paying premiums for each of your policies in order to keep the cover valid. If you stop paying any of your premiums, cover will cease on the policy (or policies) you have stopped paying for.

In terms of decreasing term life insurance, each policy sum assured will reduce at its own rate and won’t be affected by other policies you have.

If you were to pass away during the term of your policies, each policy can be claimed on by your beneficiaries.

Although, if held with multiple providers, multiple claims may need to be filed.

Can I increase my existing level of cover?

In certain circumstances, you may be able to increase your existing cover rather than taking out a new policy.

Some life insurance policies will include a ‘special events’ option which will allow you to increase your current sum assured. This includes events such as:

  • Having more children
  • Getting married
  • Getting divorced
  • Moving to a bigger property, (increase in mortgage)

By using the special events option you can increase your level of cover without any additional underwriting, (so no need to provide new medical information).

This option could be more beneficial than taking out a new additional policy if:

  • You’ve suffered a medical condition since the start of your policy
  • You’ve significantly aged since the start of your existing policy
  • Your smoking habits, drug habits or alcohol consumption have increased since the start of your policy

When increasing your level of cover it's likely your life insurance premiums will increase to cater for the greater sum assured.

Although this change is likely to be less significant than the cost of loaded premiums due to any of the above circumstances.

Please note that not all insurers/policies will include the special events option and you may want to check your policy terms and conditions.

Can I have the name the same beneficiary across multiple life insurance policies?

Yes, it’s possible for you to name the same person as a beneficiary across your multiple policies.

Each policy will need to have at least one named beneficiary but it’s also possible for each policy to have more than one beneficiary.

For example, if you have a partner and children you may want them to benefit from the pay outs from all of your life insurance policies to ensure all costs are covered for them.

Alternatively, if taking out different policies for different reasons, you may choose to have different beneficiaries named on each policy. For example, a business owner may want one pay out to be received by their spouse and another to be received by their business partner.

You can ensure your beneficiaries won’t pay inheritance tax on the pay outs they receive by writing your life insurance policies in trust.

Writing your policy in trust detaches your life insurance from your estate so it won’t be subject to 40% inheritance tax upon your passing.

At Reassured we can write most policies in trust at no extra cost.

Is it good to have multiple life insurance policies?

As discussed, it can be beneficial to have multiple layers of life insurance to ensure all aspects of your life are protected.

Whether or not adopting an all-encompassing solution or multiple policies will depend on your individual circumstances and available budget.

Having multiple policies in place will require numerous premium payments, which requires additional budgeting.

It can be possible to secure the overall sum assured from multiple policies in one single policy that meets all of your needs, for less than the total sum of multiple premiums.

It’s always best to discuss your cover requirements with an expert who can obtain multiple quotes to help you determine the most cost-effective option.

Top tips when securing multiple life insurance policies

  • Regularly evaluate your existing life policy to ensure your level of cover is still meeting your needs
  • Consider cancelling your existing policy and taking out new cover, rather than taking out an additional life insurance policy, as this could be more cost-effective for your new circumstances
  • Discuss your employee benefits with your employer (if receiving death in service benefit, this may reduce the amount of personal cover you need. Alternatively, if you leave a job that offered death in service and your new employer doesn’t offer this, you may choose to increase your own coverage)
  • Check with your provider whether your existing policy includes the special events option as you may be able to increase your level of cover without the need for additional underwriting
  • If you have an existing policy but it’s not written in trust, you may choose to write your new policy in trust to avoid your loved ones paying 40% inheritance tax
  • It’s important to be aware that different policy types protect different aspects of your life, so as your needs change you may want to adjust your cover accordingly (for example, when buying a house you may want to take out a decreasing term policy to protect your mortgage)
  • Always compare quotes to secure the best available price (you could spend time doing this yourself or let a broker, such as Reassured, source these for you to help save you time and money)

Compare life insurance quotes

No one knows what life has in store, so you may wish to pre-plan and take out multiple policies from the get-go or you may decide to take out more cover as and when your life evolves.

No matter when you take your cover out, using a life insurance broker (like Reassured) allows you to compare multiple quotes to ensure your cover meets all your needs.

Due to the different underwriting processes employed, prices can vary significantly between providers, which is why it’s essential to compare quotes.

At Reassured, our primary goal is to help you secure the right policy for the best available price.

Even if you already have life insurance in place but didn’t carry out a price comparison, it may benefit you to compare quotes now to see if its more affordable to secure new cover.

Again, we can help you compare multiple quotes from some of the leading insurers quickly and easily.

Our award-winning service is FCA-regulated and we don’t charge a fee for our quotes.

The best part is our cover starts from as little as 20p-a-day, so why not get in touch?

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Sources:

[1] SunLife (2021), Cost of Dying Report, sunlife.co.uk/costofdying2021

^£19.11 per month pricing includes a £75 discount only available to Co-operative members and is based on a 50-year-old purchasing a Co-op Simple Funeral Plan at £3,020 over the maximum term available of 25 years (total amount repayable £5,733.40) as of 1st March 2021

**£5 per month Income Protection quoted rates are subject to individual status, occupation and medical underwriting as of 18th February 2021

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