You can have more than one life insurance policy | Columns


A relative of mine recently mentioned she had two life insurance policies. Is it OK for a person to have more than one life insurance policy? If so, why would someone do that? -Victoria

There aren’t any rules against having more than one life insurance policy. The only real problem is it might complicate your life a little in terms of having multiple premium withdrawals, checks or possibly additional policy fees to worry about every month.

It’s cheaper just to have just one policy, generally speaking, but regardless of whether you have one or more, I always recommend having 10-12 times your annual income wrapped up in a good, level-term life insurance policy.

Different people have different personal and business financial situations, so there could be many reasons to have more than one life insurance policy. I have lots of insurance connected to our estate plan, our business and different kinds of things.

Most life insurance companies will only write so much in coverage for one person, so when this has been the case, I just went to another carrier for additional coverage.

Also, some people buy more than one life insurance policy just to feel secure from a provider standpoint. If one insurance company goes out of business, they’ll still have another policy — or more — in place.

That’s not usually a big problem, though, since the majority of insurance companies have insurance to back them up with the state, or are very financially stable.

I hope this helps, Victoria. —Dave


My husband and I have paid off all our credit card debt, and we are following your Baby Steps plan. We still owe about $40,000 on two cars, and our combined income is about $150,000.


Since we have a good income, we were thinking about finishing our emergency fund and contributing to our IRAs while we finish off the car payments. Under the circumstances, is this OK? -Paola

I understand the temptation you guys are facing. But there’s a power in behavior modification on a short-term basis that supersedes the power of mathematics. Stick to the plan, and pay off the cars first.

When you’re still on Baby Step 2, you need to stop all saving and investing, and attack your debts with a vengeance.

You’ve got a lot of money wrapped up in cars, and even with all the great work you two have done, I know it’s probably still a little hard to see light at the end of the tunnel. Debts that large can be intimidating.

But I’m afraid you’ll lose focus and intensity when it comes to getting out of debt if you worry about your emergency fund and setting aside for retirement too soon. I’ve seen that happen to lots of people, and when it does, it can end up taking several years to get rid of all that debt.

You guys have made great progress, and you’re making good money. If you stay gazelle-intense about getting out of debt, those car payments can be history in about a year and a half.

Think about how fast you can get that emergency fund in place then, and how much money you’ll have freed up to go into retirement.

Now is the time to roll up your sleeves, get mad about all that stupid debt and knock it out once and for all. You can do this, Paola. —Dave

DAVE RAMSEY has written seven best-selling books. Since 1992, he has helped people regain control of their money, build wealth and enhance their lives. More than 18 million radio listeners hear him each week. Follow him at


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