Life Insurance Blog

What happens if you have two or more life insurance policies?


It is not uncommon to have more than one life insurance policy. There are often some legitimate reasons to do so, but maintaining more than one policy may also have disadvantages. The following article will help you decide whether having more than one policy is right for you.

Reasons for having more than one policy

There are many valid reasons people may have two or more life insurance policies.

A change in situation

One of the most common reasons people have more than one insurance policy is due to their situation changing over the years. For example, at a young age, with no children, a couple may only be interested in protecting their mortgage against unexpected death. However, once children come along, replacing lost income becomes a priority and the amount of Life Insurance needed increases. While it may be possible to simply increase the cover in the first policy. A more appropriate course of action may be to take out a second policy to cover the increased need.

Stepped and Level Premiums

A life insurance policy can be setup with two different types of life insurance premiums, stepped and level. Each premium type has its advantages and, therefore, a person may choose to split their Life Cover between one Stepped Policy and one Level Policy.

Inside Super and Outside Super

Most Superannuation funds automatically include a small amount of Life Insurance. While there are advantages to having Life Insurance inside Superannuation, there are also disadvantages. Some people, therefore, choose to have some of their life insurance outside Superannuation.

Personal Needs vs Business Needs

An individual who has protected their own financial situation may also require Life Insurance as part of their employment situation. Life Insurance is often used to protect businesses against the unexpected death of an equity holder or Key Person. The individual is still the Life Insured, but the business will pay the premiums.

Important Considerations

Be sure to disclose

Generally when you apply for a new insurance policy, you will be asked by the insurer whether you have any other insurance policies in place. When this occurs, it is important that you accurately disclose any other insurance you have (including within Super). If you fail to disclose there is a possibility the new insurer could refuse to pay in the event of a claim.

Saving money

While there are valid reasons to have more than one Life Insurance policy, for many people it is simply a waste of money. Every policy includes a policy fee, so by reducing your number of policies to one, you may realise a substantial cost savings by eliminating the extra policy fees.

Consolidating Policies

There are many ways to go about reducing the number of policies you hold. The key questions to ask prior to making any changes are:

  1. How much life insurance do I need overall?
  2. What are the benefits/costs of each of my existing policies?
  3. Can any of my existing policies be changed to match my new needs? If so, how?
  4. Are there newer policies available that may offer a better alternative than all my existing policies?

How we can help

The personal risk specialists at LifeInsuranceQuotes are experts at helping our clients find the most appropriate life insurance solution for their unique situation. We constantly review products from Australia’s highest quality insurance companies, enabling you to easily compare and make an informed choice. Complete our online form today and one of our life insurance experts will contact you within 24 hours.


Stephen Handley
Stephen Handley
My name is Stephen Handley. I have over 20 years experience in IT, Project Management and Financial Services. By combining this experience, I hope to make it easier for Australians to find good quality and affordable life insurance. Furthermore, I am not connected to any life insurance company. So, in the unfortunate event of a claim, you'll have someone in your corner, representing your interests.