My husband has 5 or 6 life insurance policies on himself, all with me as the beneficiary. He has 2 policies through his union, 1 through his job, and the rest he purchased. We live in California, I was wondering if this is legal? If he were to die would I be entitled to the money from all the policies? I think there is no need to have so many policies & continues to pay for them, one is fine. Please advise.
Home | Insurance | Blog article: Is there a limit on the number of life insurance policies one person can have?
Hadley 1:02 pm on March 20, 2010
No, there is no limit on the number of life insurance policies a person can have.
Each application for life insurance usually asks if you have other life insurance, and how much coverage on each policy.
The insurance company wants to make sure you aren’t over-insured, so there isn’t a reason for you to end your life, or someone to kill you.
That being said, a life insurance policy has exclusions. If you commit suicide, the policy will not pay out if the suicide happens within two years of purchase of the policy (one year in some states like Colorado).
Also, if you misrepresent an answer on the application, and you die within two years of the policy being purchased, the insurance company can contest the payout.
It is usually better to have fewer policies, less fees and expenses related to the policies. But, if you are not responsible for your husband’s death, the policies should pay out in the event of his death.
I hope that helps! Best of luck to you and your husband.
P.S. – Do you have life insurance on yourself? If not, you may want to consider it for your husband and family’s sake.
wartz 1:02 pm on March 20, 2010
I know of no legal limit but as a practical matter it would be better to have one big policy instead of a number of small ones because part of the premium pays processing costs, something that has no relationship to the policy amount. If the purchased policies are through the same company, he should see if the billing could be consolidated and the premium reduced. Union and employer provided policies come with group rates which may be better than going it alone, particularly if he is a smoker.
Unless you murder your husband, you will be entitled to all the polciy benefits if he dies first.
engineer50 1:02 pm on March 20, 2010
There is no limit on number of life policies one can buy. Each functions on its own.
mbrcatz17 1:02 pm on March 20, 2010
Nope, there’s no limit.
Yes, it’s legal.
You are entitled to any benefits paid out, where you are the named beneficiary, IF you don’t kill him, or have him killed.
aaron p 1:02 pm on March 20, 2010
There is no limit on the number of policies a person can own. There is a limit on the face amount each person qualifies for, but this does not effect policies that have already been issued, only new ones.
They might all have different purposes, but on the other hand, consolidating some of that coverage might make more sense too. Talk to a few different insurance brokers about this.
jeffery d 1:02 pm on March 20, 2010
No there is no limit on how many he can have. One policy per family should be all you will need. One individual policy for the whole family and one group policy per spouse will be fine also. The reason is that every policy has a annual fee attacted to it. This fee can be $25 – $100 for each policy. So with 6 policies he could be paying up to $500 in annual fees without having to. He could invest that $500 into mutual funds. $500 X 30YEARS= $15,000 THAT @ 10% can grow to $155,000 roughly. So you need to talk with him about the high cost of having many different policies.