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Supplemental life insurance

Multiple life insurance policies

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Learn why you might want to take out additional life insurance policies

Life insurance is a very important type of coverage and for some people the right choice means taking out more than one policy or multiple types of additional coverage. This supplemental coverage allows them to provide even more financial protection and security for their loved ones in the future.

Name Product Issue Ages Minimum Coverage Maximum Coverage
18 - 85 years old
$50,000
$10,000,000
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18 - 80 years old
$50,000
$25,000,000
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Why have supplemental life insurance?

  • Personal and business policies. Some people have policies to protect themselves and their family as well as an additional policy to protect key workers in their business or to ensure business expenses are covered if they’re unable to work.
  • Change to policyholders situation. You may decide that you don’t have adequate protection following the birth of a new child or upgrading homes. While many policies will enable people to increase their insured amount, it may be more beneficial in some cases to take out an additional policy with benefits tailored to new needs.
  • Greater level of coverage. You may wish to have extra protection that isn’t offered by on a current policy. For example a life insurance policy may offer disability as an extra feature but it may not have the necessary benefits that are available on a standalone policy.

Will additional policies payout benefits in a claim?

  • Yes. You can receive payment from both policies if you satisfy the conditions of both policies.

What to consider if you want multiple life insurance plans

Having additional coverage and security is certainly not a bad thing, however, there are a few considerations that you should think about when it comes to taking out multiple life insurance plans. Some of the things to consider include:

  • Managing multiple plans could be more difficult: The more life insurance policies you have, the more time you’ll have to put into managing and reviewing them.
  • The cost implications of multiple plans: You’ll have to meet premium payments for each plan that you have in place, which could be costly.
  • Time implications: You’ll not only have to dedicate time to researching plans and providers, but you’ll also have to review and check your life insurance coverage to make sure it meets your needs.

What extra policies do people take out on top of life insurance?

On top of their life insurance plan, the other policies people take out include:

  • Critical illness. To provide a lump sum benefit payment if the insured is diagnosed with a specified medical condition.
  • Disability. Helps with expenses if the insured becomes disabled and is unable to work.
  • Funeral. To help cover the cost of a funeral.
  • Accident. Provides lump-sum payment for accidental injuries.
  • Accidental death and dismemberment. Provides lump-sum payment in the event of death or loss of limbs via accident.

Multiple life insurance claims

Provided that your claim satisfies the terms and conditions in the policy, there should be no reason why you can’t file your claims on multiple life insurance policies. However, it’s important to remember that the eligibility of the claim will be determined by each individual insurer who will likely have their own specific set of rules and regulations.

Consult both insurers before you apply

It’s essential to consult with the individual insurance providers to get a clear understanding on whether or not you may be able to obtain additional life insurance policies. They’ll also be able to provide more information about any implications if you own multiple life insurance plans.


Can I nominate multiple life insurance beneficiaries?

Yes. Most insurance providers will allow you to nominate multiple beneficiaries in the event of a life insurance claim — the number of beneficiaries you have may vary between providers.

Common life insurance beneficiaries are your partner, spouse and or children. However it’s not uncommon to have a beneficiary be other family members, such as siblings or aging parents, business partners or other individuals who are financially dependent on you.

How to split up what’s paid to your beneficiaries

You’ll have to determine a percentage split for your beneficiaries — this’ll determine who gets what share of the benefit.

It’s important to keep your nomination current to account for any circumstantial changes such as separation, divorce or death. This will ensure that the benefit doesn’t end up anywhere other than with your intended recipients.

How a $500,000 life insurance payout is split

Name of the beneficiaryDate of birthRelationship% SplitBenefit received
James Doe5/25/2005Son40$200,000
Judy Doe8/15/1982Wife40$200,000
Darren Brown6/12/1975Business partner20$100,000

Is there a need for additional coverage at different life stages?

It’s important for anyone with life insurance coverage to review their needs on a regular basis, as these can change dramatically due to things such as:

  • Changes in your job, health or financial circumstances
  • Marriage
  • Having children
  • Buying a house

Alternatively, you may discover you have too much coverage and can save money on your premium payments by making reductions.

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William Eve

Will is a personal finance writer for finder specialising in content on insurance. While he cannot give personal advice to clients, Will enjoys explaining the intricacies of different types of protective cover to help individuals and businesses find affordable cover that won't leave them underinsured.

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