Changing a Life Insurance Policy

You embrace life’s moments while we help you protect them.

Overview

Having a Life Insurance policy in place will allow you peace of mind that your loved ones will be taken care of financially should you pass away. As a policyholder, you know a lump sum will be paid tax-free to your beneficiaries on your death.

In some circumstances, you may consider changing your Life Insurance policy. Whether it is the policy itself or the provider, changing a Life Insurance policy is a decision that needs consideration.

Having the correct cover for your specific needs is the most important factor.

Your current provider may be able to rearrange the details of your policy or perhaps another provider will be more suitable.

Changing Life Insurance Policies

Below we look at some of the important factors to consider when assessing your Life Insurance options.

Can I change my Life Insurance policy?

Yes. However, the first port of call is to ensure you are not uninsured at any point. Do not cancel your current policy when assessing your options.

It is also worth noting that it is not like car insurance where you can simply swap to a new provider. Changing providers will require submitting a new application from the beginning of the process.

When should I consider changing my Life Insurance policy?

A change in your life should often mean a change in your Life Insurance policy. Any significant event should prompt you to review your policy details.

Moving house

In some cases, you may be using your Life Insurance to cover a mortgage. However, if you move to a larger, more expensive house then your debt may increase. Therefore, your existing Life Insurance policy may not be sufficient.

In this case, it may be necessary to increase your level of cover.

Starting a family

The addition of children into your life means you now have someone financially dependent on you. The purpose of Life Insurance is to help those left behind cope financially.

Your Life Insurance policy term should run until your youngest child has reached age 23. If you are unsure, you can contact our team or find out more in our in-depth guide on how much Life Insurance you may need.

How do I change my Life Insurance policy?

When considering altering or changing your policy you have a couple of options. You can look at staying with your current provider and changing details within your policy.

Or, you can assess whether switching to a different provider may be more suitable. It is worth noting that switching to a different provider will mean starting the application process from the beginning.

Process of changing your provider

Changing your Life Insurance provider will mean applying for new cover. Each insurer will have criteria relating to eligibility.

From here, the new provider will offer a policy and terms or may require further medical information.

Changing policy usually follows a similar process to the below:

  1. Review your current policy in detail and assess whether it suits your specific needs. In some cases, recalculating may be necessary.
  2. Comparing the market and assessing the pros and cons of each provider. It is important to choose a broker who has access to all the major insurers.
  3. If you and your advisor agree a more suitable cover is available elsewhere, you can begin the process of switching providers.
  4. The final step is to complete the paperwork for the new provider and submit your application.
  5. Once your application is accepted and live, you can cancel your previous policy.

If you are unsure whether you should switch or not, please feel free to contact our team. Our advisors are on hand and can discuss potential options.

Reasons for changing Life Insurance provider

There may be several reasons you would like to change your policy. Costs being the obvious one. However, it is important to not judge providers and policies solely on price.

Providers will offer different additional benefits that may be important to you.

Other common reasons for changing their Life Insurance provider are:

  • Unhappy with the level of customer service provided.
  • Product offering is too limited.
  • Outdated and difficult to use technology.
  • Other providers offer a more suitable product/service.

What should I consider before changing Life Insurance providers?

There are some considerations before switching Life Insurance providers. Often the process will be seamless. However, there are aspects to keep in mind.

1) Does the new policy offer the same benefits as your current one?

Changing providers to a cheaper policy based on price alone should not be encouraged. You should only switch where you will have the same or better coverage.

Specific aspects to look at when comparing policies are:

  • Whether the new policy has a conversion option.
  • If applying for Specified Illness Cover, what illnesses are covered in the new policy?
  • If it is a Whole of Life policy, is there a cash-back option?

2) Has the state of your health changed in recent years?

If you have had any medical conditions in recent years this may affect your eligibility when applying for a new Life Insurance policy.

Switching providers will mean starting an application from the beginning and proof of good health may be required. This could be a report from your doctor or involve undergoing a medical examination.

3) What additional benefits will your new provider offer?

Within their offering, each insurer will offer additional benefits. These are add-ons to your policy to attract you to use one provider over another.

These additional benefits come in many shapes and sizes. For example, Aviva offers a service called ‘Best Doctors Second Medical Opinion’. This service gives the policyholder access to over 50,000 of the world’s top physicians.

This gives you the opportunity to double-check any diagnosis or treatment you may have been offered.

Are there alternatives to switching providers?

Yes. You could stick with your current provider and alter the terms of your policy. Although this is not encouraged without the assistance of a qualified financial advisor. 

Altering the terms and conditions of a policy can lead to issues. In some cases, changing policy or provider may mean higher premiums.

It is also important you are not uninsured at any point if considering switching providers. Do not cancel your current policy until a new one is in place.

How many providers of Life Insurance are in Ireland?

There are currently five main players in the Life Insurance industry in Ireland. These are:

  • Aviva
  • Zurich
  • Royal London
  • Irish Life
  • New Ireland
Life Insurance companies Ireland

Many of the above are household names, However, we all have different needs and there is no ‘best’ provider.

The best provider for you is the one who can offer the most suitable policy.

At emero, we hold agencies with all of these Life Insurance companies. This means we have the ability to assess and compare the market on your behalf. We are not tied to one insurer meaning we can advise you solely on what policy is most beneficial to your needs.

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Tips for choosing the right amount of Life Insurance cover

The appropriate amount of cover will vary depending on your personal circumstances. If you are considering changing policies or providers, using the below checklist will assist you.

1. Assessing your current financial situation

Taking time to assess your financial situation as a whole should be the first step in the process. Consider any current financial support that may be available such as an emergency fund of death in service benefits through your employment.

You may also have other insurance policies in place. Perhaps you are considering changing policies to consolidate them into one policy to make it more manageable.

Often, we are not as prepared for an unexpected event as we may have thought.

2. Calculating how much cover you may need

Calculating the correct amount of cover is the most important factor. You neither want to be under or over-insured. Most people take out Life Insurance to provide financially for a dependant should they die.

Therefore, the age of your youngest dependent should help decide the appropriate policy term. Choosing a policy term where your youngest child has reached age 23.

For example, if your youngest child is age 3, a 20-year policy would suffice.

The amount of cover needed will be influenced by a number of factors such as:

  • Loss of income – calculating the loss of income should you die. This is not as simple as subtracting your salary. Other elements such as the State widows’ pension and death in service benefits may apply.
  • Mortgage/Debts – any outstanding debts or loans should be taken into account. The value of your house compared to your original mortgage should also be assessed.
  • Investments/Assets – any investments or assets that provide a regular income even after your death will affect the amount of cover required.

If you are unsure of how much life insurance you may need, we have written a more in-depth guide with a case study example.

3. Comparing the market

As with any insurance policy, it can be a valuable exercise to compare the market.

At emero, we work alongside all the leading insurers giving you a wide range of options.

We all provide access to a free quote engine. You can use the quote engine to assess quotes from different insurers. We also have a team of qualified advisors who are on hand to assist and answer any questions you may have.

4. Has anything changed since you took out your current policy?

If your existing policy is from some time ago, certain aspects may have changed in the meantime.

Perhaps you have stopped smoking? If you have not smoked or used nicotine replacement products in more than 12 months you may be eligible for a lower premium. However, this is not guaranteed.

5. Speak to an advisor

The best tip to ensure you choose the right amount of Life Insurance is to speak to an advisor.

Take time to chat through your specific situation. Include the factors above and assess what the appropriate amount of cover may be. You can also discuss conversion options and Specified Illness Cover.

There is no universal policy suited to all and therefore seeking advice from an experienced professional is important.

How emero can help

At emero, we advise clients on these policies on a daily basis.

We also specialise in Insurance. We do not deal in pensions or investments meaning all our time is spent assisting clients in this specific area.

If you would like to speak with a member of our team you can use the live chat function at the bottom of your screen, by phone, or by email.

Alternatively, you can request a call back at a time convenient to you. From here you can ask any questions you may have and assess potential options.

Key Takeaways

  • Switching provider or changing the terms of a Life Insurance policy should only be done after seeking advice.
  • Policies are often not like for like and different providers will offer additional benefits.
  • A significant event that changes your life often means you should revaluate your policy.
  • It is not advised to switch providers based solely on price.
  • Use the link to our guide within the tips section above to calculate how much coverage may be needed.
<b>Ian Kennedy QFA</b> <br>Senior Insurance Advisor</br>
Ian Kennedy QFA
Senior Insurance Advisor

Ian is one of our Senior Financial Advisors at emero and has worked within the financial sector for the past five years. If you would like to chat with Ian directly, please get in touch with him at 

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