categorySprive Academy

A Guide to Changing Life Insurance Policies

Can I switch life insurance companies?

When you purchase a life insurance policy, you are not obligated to stick with the same insurer for the entire duration of the plan. At any point, if you feel you want to review your decision and shop around for other options, you are entitled to do so.

Change of life insurance

Evaluate your needs: Go over your current life insurance plan, and determine whether it is sufficient to cover your dependents (ie your children or a family member) in the case of your untimely demise. If you consider it insufficient, determine what you would ideally like as part of your new life insurance policy

Shop different rates, and speak to an adviser: You can book an FCA-approved life insurance adviser through the Sprive app. They will help review your policy, determine whether you are eligible for a lower premium, and offer you a free quote.

Review the new policy: Go through the terms and conditions of your new policy, review whether to check the duration, amount and premiums matches your needs and preferences after you have been approved. Make sure you make a decision that your future self would not regret.

Should you review your life insurance cover?

If you have recently improved your past habits, such as quitting smoking, or changed to a less risky occupation, you may be eligible for lower premiums. This could also be done by starting an exercise program, getting yourself in better shape, and developing new, better habits - as all of these would increase your life expectancy.

Furthermore, your life expectancy would also go up if you changed your career path and took up a new job, from something riskier such as mining to a regular day job. Most people would be eligible for lower premiums if this was the case. If you fall under this bracket, you may want to review the life insurance plan you have with your existing provider.

If you have additional dependents (i.e. have had more children since initially getting your life insurance policy), and feel as if the current plan payout is not large enough to suffice your dependents - it would likely make sense to review your life insurance cover. A larger payout would also be needed if you decide to move houses, and thus would have a bigger mortgage.

Furthermore, if your financial well-being has improved, and you have been able to pay off a significant amount of your mortgage, you may not need as big a payout as initially anticipated. It would thus be sensible to review your life insurance plan, and potentially switch to a plan that aligns better with your needs, as your current insurer may be offering higher premiums.

How do you get more cover?

If for any reason you feel that you need additional coverage on your existing life insurance policy, it would be best to speak with an adviser first. You can book an appointment with an FCA-approved life insurance expert via the Sprive app, to gain an expert's opinion.

After you've spoken to the advisor and decided that you would like to get additional cover, he will offer you a free quote, which you can accept after reviewing the conditions.

Changing life insurance provider

Here are a few things you many need to be aware if you decide to change policies.

  • As you get older you may have to pay a different / higher premium, as your health could be not as strong as if you were younger, hence the life insurance provider would have to take on more risk.

  • Your current insurer may ask for a cancellation fee if you do decide you want to cancel your existing policy

  • Your new life insurance plan application may not be accepted, by the new insurer

  • There may be a “contestable period”, which is a 1-2 year period where the insurer reviews your plan. In certain cases, they may also not pay out a death during this period.

What are the alternatives to changing life insurance providers?

If you are considering changing your existing life insurance policy, there are a couple of things you can do.

Firstly, it is imperative that you make sure this is the correct decision for you to thoroughly review your coverage and assess your needs, before making a decision. As well as considering how much cover the new life insurance provider will offer.

If you feel that your current policy lacks certain features, you can check with your provider if they offer additional coverage, or riders that you can add to your policy. This way you can enhance your coverage without changing insurance providers.

After shopping around, if you've found a different provider offering better rates, you can bring these quotes back to your existing provider to negotiate. At times, they may offer additional benefits or lower premiums to add to your current plan.

If you have term life insurance, and your needs have changed, your current provider may be able to switch your plan to a whole-life insurance policy.

Instead of changing providers, you can talk to your existing providers to see if your new circumstances qualify you for a revised premium. You may qualify for additional coverage.

Consulting a financial advisor may be of good use to you if you are in this situation. You can book an appointment with an FCA-approved life insurance advisor through the Sprive app, who will be able to guide you to make the correct decision and figure out how to act in the long run while providing an answer to all your questions.

Do you have a joint life insurance policy?

A joint life insurance policy is a policy that would cover two people, typically you and your partner. This could be a viable option for couples who want to ensure that their partner would get a lump sum in the event of their untimely passing.

There are two different types of coverage options for joint life insurance insurance policies

First, to die policy pays out a lump sum after the death of the first person in the joint life insurance plan. Thus, the partner of the deceased received a payout upon their passing

The survivor plan pays the lump sum when both insured individuals have passed away. This is generally used for real estate purposes, ie to pay off a mortgage, or to offer the dependents (such as the children) of the deceased

Joint life insurance policies often come with lower premiums, as the risk is spread between two people. However, a payout is only given out once, leaving the other person uninsured.

These policies also often come with some flexibility, to convert into two individual policies in cases including divorce.

It may also be something to consider if you and your partner already have joint finances, such as a joint mortgage - as the lump sum payout could be used to pay off the joint mortgage in the case of an unexpected death.

However, it is important to note that, once one partner dies, the other will receive a payout and remain uninsured, and could face higher premiums if they were to purchase another life insurance plan. Furthermore, in cases of divorce, it may be difficult to split the policy.

It would be advisable to consult a life insurance expert before making such a decision, and you can book an appointment with one click through the Sprive app.

Speak to a mortgage expert for FREE