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One? Two? Five or ten? What do you think is the maximum amount of life insurance policies you are legally allowed to have? People have varying needs for different life stages. As these responsibilities increase, so will the need for bigger and better coverage. But is the answer having multiple policies and is this even legal?

An individual can have more than one life insurance policy. Let's find the exact number.
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Key Points

  • You can have many insurance policies, you just can’t’ have more than is reasonable.People take out many insurance policies to hedge against claim rejection, enjoy different maturity periods, and more.There are solid benefits but also disadvantages of having many policies. You must analyze them according to your needs to make a decision.
  • Apart from buying life insurance for yourself, you can buy for someone else too. However, you must fulfill the legal requirements to justify this action.
  • If you think someone has a secret life insurance policy in your name, investigate it and cancel the policy if you wish to.

Is It Legal To Have More Than One Life Insurance Policy? 

Yes, it is. However, the total benefits you’re covering for cannot be more than a reasonable amount when compared to your assets and income. For example, no insurance company will give you a new contract if your total income and assets amount to $45,000 a year and you’re gunning for total coverage worth $5,000,000. This means you have to be financially eligible for the total benefits of your insurance policies or you won’t be granted a new one by a different company. Insurance companies will also require a medical exam from you even if another company has already taken you through this process.

How Many Can You Have?

You can have multiple life insurance policies with different companies. There is no fixed number or limit to the number of policies you have and there are also no restrictions on the different companies you can go to for these separate policies. It might seem like a convenience to take out multiple policies with the same provider, but we advise you to check out other shops to see what advantages they have to offer before committing to one company. Also, you should not go out taking an endless number of policies just because you can. We recommend seeking out the advice of a professional to rightly guide you. After closer evaluation, you might be surprised to know that you don’t need multiple policies after all.

Reasons Why People Have Multiple Policies

If your financial advisor has told you to purchase a term life insurance plan and close the cap, you might want to start listening to someone else. Everyone must not buy more than one insurance plan but you should get to at least listen to the great benefits it has before discarding the idea. Here are some solid reasons why you should have multiple life insurance policies:

• As a Safeguard in Case of Claim Rejection. If you have more than one policy for the same purpose, you have hedged against the risk of having your insurance claim rejected. If one company rejects your claim, the other might not and your dependents will still have financial cover after you are gone.

• For Different Maturities. Instead of buying just one term policy with a set maturity date or one whole policy that will be more expensive, you can have multiple policies with different maturity dates. This will give you adequate cover for different stages of your life.

• For Smaller Covers. Although having many small covers might be more expensive than having one general cover, this strategy could work to your advantage for the same reason mentioned above.

Does It Make Sense?

Because we all have unique needs at different points in our lives, there is no set benchmark that says everyone should have a second life insurance policy. Nevertheless, there are many peculiar scenarios where having multiple life insurance policies is the perfect solution. If you’ve been racking your brain trying to determine whether to go for multiple policies or not, these advantages and disadvantages will make your decision easier.

The Benefits

Different life insurance companies have different unique selling points. Some are experts at covering for chronic illnesses while others will offer a money-back if you don’t die when your contract expires. If you want to enjoy all those benefits or most of them, you will have to buy separate insurance policies with different companies. With different companies, you can get:

  • A better health cover from a more sympathetic company.
  • Secured investments if one insurance company goes bankrupt.
  • A special discount from a company that is offering reductions on certain policies.

The Downsides

  • You will do a lot of form filling. Insurance companies require a lot of information and the effort to provide this will be multiplied when you’re dealing with many companies and many policies.
  • Every policy has in-built fees. You will pay these fees multiplied by the number of policies you have. You will also pay premium as many times for as many policies.
  • It is advisable to review your insurance policies periodically. If you have more than one, your job will be multiplied as well.

Alternatives To Multiple Policies

Many people take out multiple policies to increase the value of their existing policy. Some life insurance companies will let you increase the value of an existing policy but another way to achieve the same thing, and sometimes cheaper, is to take a new policy. However, there is another way.

If you are always adding and canceling coverage to meet your needs, or you can forecast the need for some extra coverage in the future, you should consider purchasing policy riders. For example, you can buy a term conversion rider if you have a term life insurance policy. Every few years, this rider will let you convert some of your term insurance to permanent insurance without requiring a medical exam.

Can You Get A Life Insurance Policy On Anyone?

Any adult or legal body can get life insurance on someone else. However, to get life insurance on someone, you must have insurable interest and consent. These requirements restrict you from taking out life insurance on just any stranger you meet on the street and for good reason.

Insurable Interest And Consent For Life Insurance

If someone has an insurable interest on you, it means they will experience financial hardship or loss if you passed away. Therefore, if someone were to take out a life insurance policy on you and be the beneficiary, they have to demonstrate insurable interest. Even with an insurable interest, that person has to get your lawful consent before taking out a life insurance policy in your name. However, state laws generally consider you, your spouse, your ex-spouse, children, grandchildren, children with special needs, aging parents, or other dependents as people who have an insurable interest.

Apart from insurable interest, you also need a person’s consent before you can take out a life insurance policy on them. Although there are sneaky ways around it, it’s almost impossible to purchase life insurance on someone else without their consent. Many insurers require a medical exam for the insured. Even when they don’t, they require the insured’s signature for the life insurance contract to be valid. These requirements can sometimes be waived, for example, when a parent takes out life insurance on behalf of their minor child.

Who Can I Buy Life Insurance For?

You might already know you can buy life insurance for yourself to provide financial protection for your loved ones when you pass away. In the same way, it’s possible to buy life insurance on behalf of someone else too. Since you can’t take out life insurance for just anyone, who exactly can you do this for?

Your Parents. You can buy life insurance for your parents if you have insurable interest and their consent. If you are currently dependent on them, you signed a loan with them or you will inherit their financial obligations if they pass away, you have an insurable interest. Note that your parent’s ages will heavily influence the type of life insurance you can take out on them.

Your Partner. If you’re in a serious relationship but not legally married, you can still take out life insurance on your partner.

Your Spouse. Insurable interest is apparent in this case if you both contribute to family bills or you have a joint bank account. Your spouse can take out a life insurance policy on you after securing your consent. Insurable interest, in this case, includes engagement, having children together, and jointly owning a business or home.

Your Children. You can surely buy life insurance for your children and you don’t require their consent if they are 18 years or younger. For some insurance companies, you will need your child’s consent if he or she is over 17 years and 6 months old.

Your Business Partner. Especially in the case of small businesses, you can buy life insurance for a co-owner or key personnel in your business. If an unexpected death occurs, that life insurance can help keep your business afloat.

How To Buy Life Insurance On Someone Else?

In many situations, it makes sense to take out a life insurance policy on someone else. This may sound like a twisted plot but it is completely legal and even cheaper when certain requirements are met beforehand.

The Rules

The following requirements must be met before you can legally buy life insurance on someone else:

  • There must be an insurable interest. As we mentioned earlier, there has to be a relationship between you and the person you plan to insure in the sense that you will suffer emotional and financial hardship if they die.
  • You cannot take out life insurance on a total stranger. Also, you cannot secretly buy life insurance on someone as the insurance company has certain steps to curb this.
  • If they are over 18, the person must consent to the contract by signing the insurance application form.
  • In many cases, the insured must also undergo a medical examination from the insurance company.

Why Should You Do It?

If you are considering owning a life insurance policy on someone, you should do it when:

You’re owed child support or alimony. When dealing with exes, you need control over the policy to ensure your name isn’t changed from the list of beneficiaries.

You have co-signed a loan with that person. If the co-signer dies, the lender will still demand you pay the loan. The life insurance you took out will be of use then.

The person is your business partner. Life insurance serves as a good funder of buy-sell agreements. This makes it clear how the business will be transferred if one partner dies or becomes permanently disabled.

What To Do If You Suspect Someone Has Taken Out A Life Insurance Policy In Your Name?

Can you have a life insurance policy out and not know about it? This is not allowed by the law but there are still instances where people fraudulently took out life insurance policies in someone else’s name.

Can Someone Secretly Take Out A Life Insurance Policy On You?

During the life insurance application process, insurance companies usually put some measures in place to prevent this from happening. However, crafty people find ways and loopholes so they can secretly take out an insurance policy on others. Life insurance companies typically ask for consent in the form of a signature, medical records, and a medical exam. However, someone can illegally claim insurable interest on you and forge all the required information to get a contract running.

How To Track Down Existing Policies?

There are different things you can do to find out if someone has secretly taken out a life insurance policy on you.

Check Your Email. If you’re receiving educational and marketing emails from an insurance company you’re not registered with, someone might have a secret contract with them in your name.

Check Your Accounts. If you notice regular payments to an insurance company you haven’t registered with, you might be a victim of identity theft and someone has taken out an insurance policy in your name.

Check Personal Documents. If your spouse has group life insurance form their office, they might have included you without your knowledge. Check all your documents to be sure if this type of contract exists, especially if you’re going through a divorce.

Check with Family Members. Some family members might have some information on life insurance policies taken out in your name. if someone in your family can only remember the name of the insurance company, you can trace the rest and find definite information on the issue.

Check with Your State Insurance Department. Your state might refer you to the MIB (Medical Information Bureau) where you will pay under $100 to run a search. They might also track down a policy for you free of charge.

Hire a Policy Inspector. Many policy inspection services exist where you can track down all existing life policies on yourself.

What To Do If It Exists And You Don’t Want It?

If you discover that a life insurance policy exists on you, you are not powerless. If you decide you don’t want the policy you can do either of the following:

If the Policy was Issued Legally. Approach the policyholder and request them to cancel the policy on your behalf. Unfortunately, you cannot take this action by yourself after you have given consent for such a policy in the past.

If the Policy was Issued Illegally. You can contact the authorities and have such a policy canceled. The office of the State Insurance Commissioner or the State Insurance Bureau can open an investigation on the case allowing you to demand legal action.


There are no two ways about it, life insurance is very important for every individual, family, and business. The matter might not be a pleasant one to discuss but you must address it if you’re serious in financial security for your loved ones when you pass away. It is completely legal to have more than one policy, in fact, there is no limit on how many you can have. Because every individual’s needs are different, you might want to take out more than one insurance policy to cover for all the needs you have.

You can also take out a life insurance policy on a loved one. Note that you must have insurable interest and consent or that move is deemed illegal. If you feel someone has taken out an insurance policy on you without your knowledge, there are different ways to search and confirm this. 

This post is rich with more valuable information and instructions on how to handle the above situations accurately. Make sure to share this with a friend of yours. Let them take advantage of this information for a better financial future.