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Dave Says: More than one life insurance policy?

Published: April 27, 2022   
Dave Ramsey

Dear Dave,

A relative of mine recently mentioned she had two life insurance policies. Is it okay for a person to have more than one life insurance policy? If so, why would someone do that?


Dear Victoria,

There aren’t any rules against having more than one life insurance policy. The only real problem is it might complicate your life a little in terms of having multiple premium withdrawals, checks or possibly additional policy fees to worry about every month. It’s cheaper just to have just one policy, generally speaking, but regardless of whether you have one or more, I always recommend having 10 to 12 times your annual income wrapped up in a good, level term life insurance policy.

Different people have different personal and business financial situations, so there could be many reasons to have more than one life insurance policy. I have lots of insurance connected to our estate plan, our business and different kinds of things. Most life insurance companies will only write so much in coverage for one person, so when this has been the case, I just went to another carrier for additional coverage.

Also, some people buy more than one life insurance policy just to feel secure from a provider standpoint. If one insurance company goes out of business, they’ll still have another policy—or more—in place. That’s not usually a big problem, though, since the majority of insurance companies have insurance to back them up with the state or are very financially stable.

I hope this helps, Victoria!

— Dave

Dave Ramsey, a best-selling author, personal finance expert, and host of The Ramsey Show, can be heard by more than 18 million listeners each week.

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