Life insurance is aimed at two universal risks: survival to a certain age or death of the insured. However, the policy may also cover other risks, such as bodily injury or work injury, disability or accident.
US residents may often have multiple life insurance policies. “Many people have multiple life insurance policies and they may apply for a variety of reasons; for example, mortgage life insurance, life insurance inversion and retirement annuity,” explains Ian Freeman, Wealth Management Advisor at Freeman Group.
Different life insurance policies may provide different types of coverage. For example, universal life insurance policies may provide a funded component in addition to the coverage amount, and policies with a fixed sum insured may have different payment terms. Owning multiple policies allows you to complement your insurance needs with a wider range of coverage.
If you have multiple life insurance policies, you can assign different beneficiaries to each one. This can be useful if you want to leave money to different family members.
Some people use life insurance as part of their investment strategy or inheritance plan. They can purchase different policies with different characteristics in order to diversify their financial resources and minimize risks.
Depending on life insurance structure, some policies may provide tax benefits. Owning multiple policies can help you use these benefits more effectively.
It is important to note that before deciding to purchase multiple life insurance policies, it is a good idea to consult with an insurance advisor or financial expert to determine which options best suit your financial situation and goals.
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