A few months ago, I committed to a 30-year, $1 million term life insurance policy. I’m now debating whether to enroll in a second one for a potential 20-year ladder to the top. (I’m not sure if 1 million will be sufficient in the future due to inflation, even if I don’t lead an especially luxurious lifestyle).
I want to know if the insurance company can cancel my first contract because it’s only going to be in effect for two years if they find something in my records during the application procedure for the second one. Or does that only apply in the event that I file a claim?
When considering adding a second term life insurance policy, it’s important to understand how it might affect your existing coverage. Generally, your current policy shouldn’t be canceled just because you apply for a new one, even if the new policy might reveal new information. Insurers usually won’t cancel an existing policy unless there’s a breach of terms or a fraudulent claim. However, it’s wise to review the terms of your current policy and consult with your insurance provider to ensure there are no clauses that might affect it. Adding a second policy can help cover future needs, but make sure to confirm with your insurer that doing so won’t impact your existing coverage.
Your first policy should be safe unless you mess up a claim or lie about something big. The insurance company usually can’t cancel it just because you’re applying for a new one. If you’re thinking about a second policy, maybe chat with your agent about your concerns—they can help you sort it out.