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Can you have multiple life insurance policies?
Yes, you can have multiple policies from the same or different life insurance companies. For example, you could have a permanent life insurance policy and also a term life policy for a short-term need. But if you apply for more insurance coverage than your situation indicates you need, the insurance companies will likely ask why.
How much life insurance do I need?
A thorough "life insurance needs analysis" looks at your current and ongoing expenses, plus your future expenses like college, or your funeral. But simply adding up all those numbers could amount to a bigger policy than you need. You should also subtract assets that can go toward those expenses, such as savings and investments.
What is a life insurance premium? What happens if I don't pay?
Typically, you will have a 30- or 31-day grace period. If you pay within this time period, your policy will continue in force. If you don't pay within the grace period, your policy may lapse, depending on the type of policy you purchased. With a permanent policy, however, your life insurer may use your cash value, if available, to cover premium payments.
If you are unable to pay because you have become disabled, and you elected a "waiver of premium" provision or rider on your policy, you do not have to pay premiums for the duration of your disability. Universal life insurance policies generally offer policyholders increased flexibility in premium payments that may be important when your cash flow is variable.
What if my insurance policy lapses?
A policy (other than universal life insurance) lapses when you fail to pay your life insurance premium by the end of the grace period. If you have a permanent life insurance policy and enough cash value in it, you may borrow from the policy to pay the premium. If you have a term life policy and don't pay your premium within the grace period, your policy will lapse and simply end.
Why buy life insurance young?
An advantage to buying life insurance when you're young and healthy is you'll be able to lock in a good rate for the duration of the policy. If you have dependents in the future, you will have secured a low rates and you will have guaranteed your "insurability," meaning you won't have to worry about higher rates as you age and possibly experience declining health.
The older and less healthy you are when you buy a policy, the higher the price.
However, if you have no dependents, you don't have a current need for life insurance. You'd be better off putting your money toward savings.
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