Paying for 2 Policies from same provider

mistressmir

Hi I hope someone can help.

My husband has been paying out for 2 life insurance policies from Legal and General, the oldest policy he had when he took out the mortgage and the 2nd one was set up about 3 years ago when we made our wills, a financial adviser recommended he take out the policy but I cant see what the difference is??

If we wrote to L&G and asked to cancel the latest policy and explained why would we get the premiums repaid???

kingstreet

It's unlikely as you can have as many life policies as you like.

In the event of death, both would have paid out.

Aretnap

Probably not. Life insurance is not like home insurance - where you can only make one claim per incident, and having two policies is pointless. With life insurance each policy will pay out on its own terms if you die, and there's no reason why you shouldn't have more than one. Indeed it's very common to have more than one life insurance policy.

I have two policies myself - one to cover the mortgage, taken out when I bought the house, and a second one to provide some additional money for my wife and son, taken out when I had a baby, because my family would have plenty of bills to pay in addition to the mortgage if they didn't have my income coming in. And it wouldn't have made sense to cancel the mortgage policy and roll it into the new policy, partly because they have different purposes and timescales (the mortgage will be paid off well before the boy is financially independent, so the two policies have different end dates), and partly because I took out the first one when I was younger and fitter than I am now, which means the premiums are lower than they would be on a policy I took out today.

Obviously whether you need two policies yourself depends on your own circumstances, but it's not an inherently bad idea to have two, and as you'd be able to claim on both if your husband died then there's no reason why the provider would have to refund your premiums if you cancelled one, unless there was evidence of actual mis-selling.