Can you change your life insurance?

When do I need to change my life insurance?

When you bought your life insurance policy, you probably looked at your circumstances and needs and chose a type of life insurance that was a good fit at the time.

But these policies last years, decades even. And everyone’s life changes over that kind of time, even if just a little.

That’s why now is the perfect time to review your life insurance policy, the details of its cover and the amount assured, maybe the kind of policy itself, to make sure it’s enough.

You may need to change your life insurance if:

You move or remortgage

Lots of us take out a life insurance policy to make sure the people we love are secure in their home if we die suddenly, so the value of the insurance will often cover an outstanding mortgage, for example. But if you move into a bigger home or remortgage, your debt is likely to go up. By increasing the amount you’re covered for, you can make sure that your family won’t be left with extra financial difficulties if the worst happens.

Equally, if you make a concerted effort to pay off your mortgage faster than planned, it may not make sense to keep paying the premiums for a larger sum that won’t necessarily be needed.

The value of your property rises

A boost to the value of your property is usually a good thing. Except when it comes to inheritance tax. On your death, your dependants will have to pay a 40% inheritance tax on anything worth more than £325,000 (or £425,000 if they’re your children or grandchildren and you leave them your main residence). If you own a house and its value is increasing, life insurance can cover that tax so your loved ones can stay in the home when you’re gone. This is where you might find a trust useful.

Your family grows

There’s a lot to think about when a new child or grandchild arrives. At some point in the chaos, it’s worth reviewing your life insurance details to make sure your whole family is adequately provided for if you were no longer around.

How often should I change my life insurance?

The standard advice is to review your life insurance every 12 months. But that may be overkill if life has been consistent recently or it may not keep up if lots is changing. If you haven’t moved home, had any new children or grandchildren, or seen any change in your income in the last year, then you probably won’t need to update your life insurance.

Even then, it’s a good idea to have a quick look at your finances and see if your life insurance is still giving your loved ones enough protection.

How do I change the beneficiary on my life insurance?

The beneficiary is the person who gets the lump sum from your policy if you pass away.

If you’ve separated, or a former beneficiary has passed away perhaps, the names on your policy may need to change too.

Your insurer can sort that out fairly easily for you. Get in touch with them, and they’ll probably send you a ‘change of beneficiary’ form to complete and return. They’ll be able to walk you through any complexities to the paperwork and once it has all been completed and received, the recipient’s details should be updated within around 24 hours.

The process can be more complicated though, especially if you’ve listed anyone as an irrevocable beneficiary. This means you would need their written consent to change or remove them as a beneficiary on the policy. It’s something to think about when you take out a policy, because it could get messy if your relationship has changed.

Watch out for sudden exposure to inheritance tax too. People often use trust to avoid paying inheritance tax (IHT) on the lump sum handed out if they died suddenly. But if you change the beneficiary, the money could be taxed if you die within seven years of updating your policy.

How do I change my life insurance?

If you need to increase the amount your life insurance covers you for, there are a few ways you could change your policy:

• You could amend your life insurance with your current provider.

• You could buy additional life insurance to top up your existing cover.

• Or you could switch by cancelling your insurance and finding a new deal that better suits your needs.

Plenty of providers will let you change the terms of your life insurance once you’ve already bought it – but not all of them and some may charge anadministration fee to do so.. To find out if your insurance can be amended, take a look at your policy document or contact your insurer. Amending your current insurance is a good option if you like the provider you’re currently with. But don’t assume that your loyalty will be rewarded with the best deal on the market.

How do I switch my life insurance provider?

Switching your life insurance is easy. The best way to switch to a new insurer is to use a site like MoneySuperMarket. Our price comparison tool searches through dozens of the leading insurers to bring you hundreds of great insurance deals. Simply tell us a little about yourself and your circumstances, and we’ll handle the rest, including helping you switch over from your current insurer.

Find a great deal on life insurance?

If you’re looking to switch or change your life insurance provider, you’re in the right place. There are so many deals to choose from, and MoneySuperMarket can help. We compare deals from leading life insurance providers, finding the right match for you based on life insurance benefits and your budget.

Provide us with a few details about you and your medical history and we'll search our providers for our best deals for you to compare.

Provide us with a few details about you and your medical history and we'll search our providers for our best deals for you to compare.

Kara Gammell 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."