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Can you change your life insurance?

Find out how you can update your life insurance

Rachel Ditchburn
Written by  Rachel Ditchburn
5 min read
Updated: 23 Feb 2024

Got life insurance? That’s great. But when your life changes, so should your life insurance. Here’s why it has to keep up, and how to make sure it does.

Life insurance is one of those steadfast companions that quietly backs you up through the years. When you initially chose your policy, you likely considered your circumstances and selected a type of life insurance that matched your needs at the time. But as the saying goes, change is the only constant in life. As your journey unfolds, your life insurance should adapt to fit the new paths you take.

Policy duration and life changes

Life insurance policies are often long-term commitments, designed to provide security over decades. It's natural for your life to evolve in that span of time—new jobs, new family members, new homes. Each of these milestones could shift the landscape of your needs and obligations.

couple with umbrella

Importance of reviewing life insurance

It's crucial to periodically dust off your life insurance policy and examine it with a fresh pair of eyes. Is the coverage still comprehensive? Does the policy type still make sense for you? These are questions that merit answers. Regular reviews ensure that your life insurance remains aligned with your current situation, offering the protection you and your family deserve.

Reasons to change life insurance

Life is full of events that can prompt a reassessment of your life insurance needs. Whether it's a career leap that changes your financial picture or a personal milestone, these moments can signal that it's time for an update.

You move 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 coverage to prevent any additional financial burdens on your family.

Paying off mortgage early

Conversely, if you're ahead of schedule on your mortgage payments, you might no longer need as much coverage 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 direct descendants inheriting a main residence. A rise in your property's value could mean a need for more coverage. 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 is a joyous occasion that also calls for a review of your life insurance. More dependents mean more responsibility, and your policy should reflect that to ensure their future security.

How often should I change my life insurance?

The rule of thumb is to give your life insurance policy an annual check-up. However, significant life events like moving house, expanding your family, or a change in income can necessitate more frequent reviews.

Regular financial review

Even if life seems to be running on an even keel, it's wise to periodically review your financial situation. An annual reassessment of your life insurance ensures that you're not over or under-insured.

How do I change the beneficiary on my life insurance?

The beneficiary of your life insurance is the individual designated to receive the payout upon your death. Life's twists and turns—such as a separation or the passing of a beneficiary—might mean you need to update your policy's beneficiary details.

Changing beneficiaries

It's usually a straightforward process to change beneficiaries. Most insurers will provide a form for you to fill out, and changes can often be completed within a day.

How do update irrevocable beneficiaries?

If you've named an irrevocable beneficiary, they must agree in writing to any changes. This can complicate matters, especially if the relationship has changed since the policy was taken out.

Inheritance tax considerations

Remember, changing beneficiaries can have inheritance tax implications if you pass away within seven years of making the change. It's important to consider this when updating your policy.

How do I change my life insurance?

There are a few ways to adjust your life insurance coverage:

  • Amend your existing policy.

  • Purchase additional insurance.

  • Switch to a new insurer.

Amending life insurance

Some insurers will allow you to make changes to your policy. It's essential to read your policy document or contact your insurer to understand the process and any potential fees involved.

How do I switch my life insurance provider?

Switching life insurance providers can be a simple process. Comparison tools like MoneySuperMarket can help you find new deals and assist with the transition. Switching your life insurance is easy with the right tools at your disposal.

Find a great deal on life insurance?

Looking for a new life insurance deal? MoneySuperMarket compares deals from leading providers to find the best fit for your needs and budget. Just provide some details about yourself and your medical history, and let us do the legwork to find you the best options.

Kara Gammell.
Kara Gammell.
Life and Health insurance expert

Our expert says

Nobody really wants to think too much about the possibility of dying prematurely, but those who do, and make plans, often say it's worth it for the peace of mind alone.

But that only works if those plans keep up with us. Review your policy occasionally - just once a year or when big life changes kick in. Check your policy fits your needs, make changes as necessary and then put it down and get on with the business of living.

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