Mortgage insurance.

[Sponge]

Is there a limit on how many life assurance policies one can have? The ones that you have in place to clear a mortgage on death?

I currently have a decreasing term, joint policy in force, but they wouldn't increase the amount for a remortgage so I've had to take out a new policy. The new one is for more cover and this time, level term and two single policies. I was thinking I might keep the old policy active as the premium isn't very high and it's nice to know there's some more money there should the worst happen.

However, when I took out the new policy with Legal & General they asked if I had an existing policy and I said yes. They've now emailed me asking for the policy number so they can cancel it. They've suggested the new policy cannot start until the old one is closed. But why should it?

Edited February 15, 2013 by Sponge

[Booster]

Eh? Never heard of anything like that before. I have four separate life insurance policies all with Aviva.

Have a look at www.theidol.com they are very good and also happy to speak to you if you have any questions.

[patently]

You can have as many as you want, I've had 4 or 5 in place at times, half of them from one company (Aviva).

You just need to declare all of them when you apply for the next, and to expect questions if they're all huge and recent.

[Andy_Bangle]

You just need to declare all of them when you apply for the next, and to expect questions if they're all huge and recent.

... especially if taken out by your wife

I don't have any.

[Milo]

I have no idea whether you can have multiple decreasing term life assurance policies but it would make sense if you couldn't. You're insuring against paying off your mortgage in the event of your death. It's not the same as straight forward life assurance which pays out a fixed sum. You only have one mortgage so why would expect say 4 insurers to all pay out to cover the same loss? You wouldn't take out 3 motor policies and expect 3 lots of money if you write your car off, or 3 travel policies and expect 3 payments to cover a stolen camera.

Nor would you expect your house and motor policies to both pay out in full if a slate blew off your roof and hit your car. They would split the liability possibly, or 1 would cover the full loss.

Straight forward life assurance is different. You can take any number of policies out for any amount.

Edited February 15, 2013 by Milo
Loads of phone typos

[patently]

Good point

[Booster]

Ah yeah. Mortgage linked policy so that would make sense.

[Waylander]

I think Milo has hit nail on head. You can have multiple life policies but only 1 decreasing term mortgage policy (per mortgage)

[Sponge]

What about 1 decreasing term and one level term? Which is my scenario.

As I understand it, the decreasing term is '...designed to help protect a repayment mortgage as the amount of cover reduces roughly in line with mortgage.'

Whereas, level term is '...designed to help make sure your family are financially protected in the event of your death.'

I already have the former, and now have the latter. They're two different products, in my mind. So I shouldn't have to cancel one, to start the other.

I think the confusion, for me at least, is the terminology being used to describe these products. They're both insurance, or should that be assurance, policies designed to pay out in the event of death during the term and to pay off a mortgage. One is directly linked to mortgages in descriptions, whereas the other necessarily isn't.

Edited February 15, 2013 by Sponge

[Waylander]

Just make sure it is not declared a "mortgage" level term policy and it won't be a problem.

As said before you can have multiple policies.

[Milo]

Just make sure it is not declared a "mortgage" level term policy and it won't be a problem.

As said before you can have multiple policies.

I agree. Decreasing term or level term, if both are linked to a payout to cover any outstanding mortgage in any way, then I can understand why you can't have both policies running alongside each other.

[Sponge]

I emailed L&G when they asked for the old policy number, seeking clarification. They haven't replied yet, so I came here while I wait.

As far as I was concerned, the new policy was a simple level term, with no mention of links to a mortgage. The online paperwork supplied refers to 'Term Assurance Quotation' and 'Life Cover of £xxx,xxx'. It wasn't until they emailed me that I started to ask questions.

[Sponge]

I got a reply from L&G this morning and they have confirmed I can have both policies in force. So I'm sorted.

This thread has been very informative and thanks to all those that contributed.