Yes, you can switch insurers by cancelling your current policy and replacing it with a new one that better meets your needs. Alternatively, you might be able to alter your life insurance with your current carrier. To make sure that your cover is appropriate for you and your family, it’s a good idea to evaluate it frequently. Your personal circumstances may have changed significantly due to a new family member, a new mortgage, or simply because you were able to find a better bargain. To make sure your family is completely covered if the worst happens to you or your partner, you should make changes to your life insurance policy as well.
Why not search around for a better bargain on your life insurance like we frequently do for our auto and house insurance? In this piece, I’ll discuss a few factors to take into account and reasons you might wish to examine your cover.
Your Mortgage Circumstances Shifting
It is typical for people to purchase life insurance to cover a mortgage so that, in the event of your passing, a lump payment will be handed out to aid in paying off your outstanding debt.
The conditions surrounding your mortgage may have changed over time. Maybe you’ve moved into a bigger home, refinanced it to release equity, or your mortgage payments have altered. Additionally, you might discover that your policy only had a certain duration (corresponding to the initial mortgage term) and that it could expire before your loan is fully repaid. In either case, it’s time to alter your insurance coverage when it no longer adequately addresses your financial situation and personal needs.
Alterations in Your Family
The main purpose of life insurance is to safeguard your family in the event of an unexpected tragedy. It’s crucial to check your life insurance as your family expands since if your family gets bigger, your current coverage might no longer be adequate. If you are expecting your first child or already have children, you may want to consider increasing or changing your insurance coverage to ensure that there is an additional lump sum for your family in addition to your mortgage loan. It’s possible that you only purchased the policy to cover the mortgage. Consider how your death will affect your spouse and family; if you die, this change to your insurance could be critical to paying off debts, paying for necessities, and taking care of any young children.
You’ve Done Your Research, and a Better Policy Type Exists for You
Life insurance comes in a variety of forms, including whole life and term insurance. If you have small children, you might feel the need to prolong the duration of your current policy, which only has a 20-year term, to assist pay for their college expenses in case something happens before they become independent. Consider a term policy for that time period if you want the insurance to cover a debt that will be paid off within a certain amount of time. A whole life insurance policy provides a death benefit whether you pass away today or live to be over 100 years old. You can decide that you need life insurance for as long as you live. Other policy kinds could exist that better fit your requirements. When your personal circumstances change, you should also think about critical illness insurance and income protection insurance.
You Recently Got Married or Got Divorced
Marriage is a significant life transition. As part of the commitment you make, you take on financial responsibility for your spouse. You might need to amend the beneficiary information if you currently have policies. If you don’t currently have any type of life insurance, you should think about getting it because the premiums are less expensive the younger you are. Re-evaluating your life insurance requirements is a good idea during a divorce. If your ex-spouse is the primary provider for you and your children and passes away, you might want to make sure that protection is in place. Furthermore, if your insurance policy remains in effect after a divorce, you might wish to give your ex-spouse another thought as a beneficiary.
Modifications to Your Financial Situation
As your salary is likely to fluctuate throughout your career and your family’s lifestyle is also likely to alter, your life insurance policy may help replace your income in the event of your death. Your loved ones may be able to retain their present standard of living if you update your life insurance coverage to reflect your current salary. When your pay changes, you establish or sell a business, or you switch employment, you might want to consider modifying your policy.
Important factors to take into account if you change your life insurance coverage.
While there may be compelling reasons to change your life insurance policy or you may be seduced by the discounts displayed online, there are a few important factors you should take into account before switching your policy or your provider.
Health and Age
Always keep in mind that premiums rise upon renewal as you get older and are lowest when you’re young. When a term insurance policy expires, it may be possible to renew it, although the rate may rise. Your health is another key consideration; if you’ve experienced any health issues after obtaining your policy, your premiums may go up. For your new policy, you might need to undergo a medical checkup, so be sure to compare prices before choosing.
Review, Evaluate, and Comprehend the Policies
Check to see if the death benefit—the sum paid to your loved ones—is the same or higher for you. To determine whether the policy is worthwhile, weigh the cost against the coverage. Make sure to compare your rights and benefits under your new policy to those under your previous one because they might not match.
Verify the Holding Period
There may frequently be a waiting period before you may submit a claim under your new policy, which is usually a year or two. Check your new insurance to see if there is a waiting time.
Please contact us if you have any questions regarding replacing a policy.
