There's a surprisingly common belief that you can only hold one life insurance policy at a time — that having two means one of them becomes invalid, or that the insurer will only pay out on one. This is not true. You can hold multiple policies, and all of them will pay out independently upon a valid claim.
In fact, holding two or more policies is sometimes a genuinely smart planning strategy. The most common reason is coverage laddering: buying a large policy now to cover your peak liability years (home loan, young children), and a smaller long-running policy for later-life cover when your major obligations have reduced but you still want a baseline.
The second reason is portfolio diversification. If you want part of your life insurance to be pure protection (term) and part to be wealth-building (ULIP or savings plan), holding them as separate policies gives you full transparency on each component's performance and costs.
The one thing to be aware of: when you apply for a new policy, you must disclose all existing policies. Failing to do so is non-disclosure and can affect claim eligibility. Be transparent — insurers underwrite each policy independently, and transparency protects your family.