Can I change my life insurance policy?
Key takeaways
You can change your life insurance policy, and should actively consider doing so whenever your circumstances change
Periodically reviewing your life insurance can help you to assess if your cover still meets your needs
Changing the beneficiary is usually a straightforward process – you just need to contact your insurer
Can I change my life insurance policy?
Yes. You can – and should – change or update your life insurance policy to suit your evolving needs through life.
When you initially chose your policy, you would have considered your circumstances and selected a type of life insurance that matched your needs at the time.
However, as your life changes – perhaps with new jobs, new family members, or a new home – so your life insurance needs will change too.
By regularly reviewing your cover you can help ensure your policy continues to provide the right level of protection for you and your loved ones. Making updates when major life events take place can help prevent you from being underinsured – or paying for cover that no longer reflects your situation.
Can I cancel my life insurance policy?
Yes. You can cancel life insurance at any time. There is usually a 30-day cooling off period from the date the policy begins – or the date you receive your policy documents – whichever is later. If you cancel during this period, you usually get a full refund unless your insurer charges an admin fee or a small amount to cover the number of days you were insured for.
If you cancel after the cooling-off period, you need to check your insurance documents to see what your insurer will charge you. In many cases, your cover will simply end and you may not get a refund for the premiums you’ve already paid. If you pay annually, you may be entitled to a partial refund, but this varies between insurers. You need to scour the terms and conditions for details of any cancellation charges or refunds.
Can I switch my life insurance provider?
Yes. Switching life insurance providers can be a simple process, and comparison tools like MoneySuperMarket can help you find new deals at competitive prices.
Reasons it might make sense to switch your life insurance provider include:
You found a better deal elsewhere
Your needs have changed, and you want a different type of life insurance policy or cover
You had a joint policy with a partner but you are now separating or getting divorced
Before cancelling your existing policy, be sure to check whether your insurer charges an admin fee. In most cases, you won’t get back the premiums you’ve already paid for the time you were covered. You also won’t receive any payout unless you’ve made a successful claim.
How do I change my life insurance?
If you want to change your life insurance you can do so by contacting the insurer. There are a few ways you might adjust your insurance:
Amending your existing policy
Purchasing additional insurance
Switching to a new insurer
Some insurers will have restrictions regarding which changes you can make to your policy, or may charge fees for some changes. These should be detailed in your policy documents.
How do I change the beneficiary on my life insurance?
Changing the beneficiary of your life insurance – the person who would receive the payout if you die – is usually a straightforward process. To make a change, you need to contact your insurer. Most insurers will provide a form for you to fill out, and changes can often be completed within a few working days.
However, there are circumstances where changing the beneficiary might not be so straightforward.
Irrevocable beneficiaries
An irrevocable beneficiary is a person designated to receive life insurance payouts in a binding arrangement. This means that the beneficiary must agree in writing to any changes. This can complicate matters, especially if the relationship between the policy holder and the beneficiary has changed since the policy was taken out.
Inheritance tax considerations
Changing beneficiaries can have inheritance tax implications if you pass away within seven years of making the change. It’s important to consider the likelihood of this when updating your policy.
How often should you review your life insurance?
A good rule of thumb is to give your life insurance an annual check-up. However, significant events like moving house, expanding your family, or a change in income would also be good times to give it a once-over.
Reviewing your life insurance regularly can help ensure the cover you have still meets your needs – and provides the level of financial protection you want for your loved ones.
Ask yourself: do you have enough cover? Are the policy’s terms still suitable for your circumstances? And does this type of policy still make sense for you?
When should you change your life insurance?
Big events or life changes might prompt a reassessment of your insurance needs. For example:
You move house or remortgage
A change in residence or a new mortgage arrangement can significantly affect your financial responsibilities. Lots of us take out a form of mortgage life insurance to ensure our family's housing security. However, if you move to a more expensive property or remortgage, your debt may increase, and so should your life insurance cover.
You pay off your mortgage early
If you're ahead of schedule on your mortgage payments, you might no longer need as much cover as you initially thought.
It's a good idea to reassess your policy and possibly reduce the sum assured, which could also lower your premiums.
The value of your property rises
Property value appreciation is generally welcome news. However, it can have implications for inheritance tax. Your dependents could face a 40% tax on estates exceeding £325,000 – or £425,000 for inheriting a main residence.
A rise in your property's value could therefore mean a need for more cover. Life insurance can be a tool to manage this tax, and setting up a trust can be advantageous in this scenario.
Your family grows
The arrival of a new child or grandchild calls for a review of your life insurance. More dependents mean more responsibility, and your policy should reflect this to ensure their future security.
You get divorced
Any life insurance policies naming your spouse as a beneficiary will remain unchanged unless you update it.
If you take out a joint life insurance with a partner and then split up, you will need to change or cancel the policy. Your options are:
Split the policy
One person takes over the policy
Cancel the policy
You make a career change
There are many ways a career change can influence your life insurance needs.
A new job with a higher salary might mean you can afford higher premiums and increase your level of life insurance cover.
A step-back in your career – such as going part-time to help with childcare – might mean that you are now making a less significant financial contribution to the household, and so your family could manage with a smaller payout in the event of your death
Moving to a riskier career path, such as a job where injury is likely, might mean that you need more comprehensive cover, and that your premiums will increase
Whatever direction your career change takes you in, you should reevaluate if your life insurance still works for you.
Making the switch
If your circumstances have changed, it is worth reviewing your cover at the earliest opportunity. Here at MoneySuperMarket we can help you compare policies, helping you find the right one for your needs. The process is quick and easy, and could save you money on your premiums.
Author
Rachel Ditchburn
Former Senior Commercial Manager
Rachel is a former Senior Commercial Manager at MoneySuperMarket, where she oversaw the Protection, Pet and Leisure Insurance channels. Outside of work, Rachel is a keen cook and enjoys live music,...
Reviewer
Esther Shaw
Money expert
Esther Shaw is an award-winning consumer, financial and property journalist with more than two decades of experience. As a freelance writer, she regularly contributes to a range of national titles...
