Can you change your life insurance policy?

12 min Read Published: 03 Nov 2021

Can you change your life insurance policy?In this article we explain the changes you can make to your existing life insurance policy and what is required in order to make the change. We also explain alternatives to changing your existing life insurance policy including cancelling and replacing your life cover.

Can you make changes to your life insurance policy?

Yes, you can make changes to a life insurance policy, however, there may be some limitations or restrictions depending on the type of changes you want to make. In some circumstances, it may be better to take out a top-up policy or even replace your existing cover altogether, however, any new application will be based on your age and health at the time of the new application and so may be more expensive.

What can you change on a life insurance policy?

Below we list some of the most popular reasons for changing a life insurance policy and provide guidance on how to make the change. Every insurance company will have its own set of rules and procedures and so the below information should only be used as a guide.

Marriage

You don't necessarily need to inform a life insurance company if you get married, however, if your name has changed as a result then it makes sense to get in touch with them to ensure that your policy name matches that on your identity documents. Most companies will need to see a copy of your marriage certificate and, depending on the company, you'll be required to send either a scanned copy or a physical copy in the post.

Separation / Divorce

You may want to amend your life insurance policy if you get separated or divorced. Most insurance companies offer a separation option that enables you to split a joint life insurance policy into two single policies. A separation option can usually be applied if any of the following apply:

  • if a couple divorce
  • if a couple dissolves their registered civil partnership
  • if either of you takes over an existing mortgage in one name
  • if either of you takes out a new mortgage in one name

Most insurance companies will accept a 'separation option' request so long as the application is received within 6 months of the event.

Reduce the amount of cover

Some life insurance companies will allow you to reduce the amount of life insurance you have without the need for additional questions or medical evidence. In most cases, you'll be provided with a reduced premium which you will need to accept. Not all life insurance companies will allow you to amend your existing cover and so you should consider replacing your existing cover with a brand new policy for the amount you require. An independent life insurance specialist will be able to compare the best and cheapest life insurance policies on the market to tailor a policy that best suits your needs.

Increase the amount of cover

Some life insurance companies will allow you to increase your life insurance cover without the need for further investigations or medical evidence but only for the following events:

  • the birth of a child (or if you legally adopt a child)
  • if you get married (or enter into a registered civil partnership)
  • if your earnings increase due to a new job (or promotion)
  • if you increase your mortgage due to moving home (or if you are undertaking home improvements)

Most insurers will allow you to increase your existing cover by up to 50% of the original amount for each of the above-listed events, sometimes limited to a maximum of 3 increases in total. There is usually a cap to the amount you can increase your level of cover up to and this is usually around £150,000 to £250,000 if it is a lump sum payment. So, any life insurance that already exceeds the cap usually can't be increased by this method but you should check the terms and conditions within your policy as this option is sometimes excluded from the outset.

You should check whether your life insurance company accepts increases to your existing cover under a policy provision that is usually called the Guaranteed Insurability Option or GIO or alternatively, you can give the insurance company a ring and ask. Guaranteed insurability options allow the policyholder to make changes to their life insurance without the need to complete new medical and lifestyle questions or attend health checks. This can be particularly helpful if your health or circumstances have changed since you bought your life insurance but not all health changes will affect a new life insurance application so it is usually a good idea to speak to a life insurance specialist* who will be able to advise which route will be best. The specialist adviser will review your cover to check whether you are able to make the changes that you require which is helpful as policy terminology can be difficult to decipher.

Decrease the length of the policy (reduce the policy term)

Some life insurance companies will allow you to reduce the policy term without the need for additional questions or medical evidence. As with reducing the amount of cover, reducing the policy term would usually result in a reduced premium, which you will need to accept. Once again, not all life insurance companies will allow you to amend your existing cover and so you should consider shopping around for a new policy that could replace your existing cover.

Increase the length of the policy (increase the policy term)

Increasing the length of the policy (often referred to as increasing or extending the policy term) may be possible however you will often be required to provide further information and additional medical evidence. A better option for most is to take out an additional 'top-up' policy that can sit alongside the existing life insurance policy. We explain more about applying for additional life insurance below.

Change the way you pay your premium (Monthly or Annually)

Most life insurance companies will allow you to change the way you pay your premiums, changing from monthly to annual premiums or vice versa. Depending on the insurance company, you may be offered a slight reduction in your premiums if you are changing from monthly to annual premiums, however, this isn't always the case.

Typically, paying for your life insurance annually rather than monthly will save you around 5% on your premiums

Can you take out a new life insurance policy instead of amending your existing cover?

Yes. In fact, for most people, this could end up being both quicker and cheaper. You should consider using LifeSearch*, an independent life insurance specialist who can assess your existing life insurance arrangements and work out which option suits you best. It is always wise to keep your existing cover in place until you have applied for and received acceptance terms to switch your life insurance over and the advisers will help make the transition smoothly. They provide expert, tailored advice and can recommend whether you should amend your existing cover or whether it would be better to replace it.

Simply click on the link above and fill in the short form to arrange a callback at a time that suits you. You receive additional support and advice throughout the application process including how to ensure that future proceeds are paid in the most tax-efficient manner. Additionally, if you take out a policy using the above form you would qualify for up to £100 cashback.

Cancelling your existing cover

If you decide you no longer need your existing life insurance it is relatively easy to cancel your existing cover. The simplest way is to cancel your direct debit and you should expect your life insurance company to write to you explaining that the policy has been 'lapsed' as they have been unable to collect your monthly premium. A life insurance company will usually continue to try to collect premiums for one to three months before writing to you to confirm that your policy has been cancelled. You can usually still re-instate a life insurance policy while it is in a 'lapsed' state, typically within three months of cancelling a direct debit, however, you will be expected to catch up on the missed premiums. Cancelling your life insurance should always be a last resort and should only be done if you already have alternative life insurance in place or if you no longer need it. Check out our article 'Can you cancel life insurance (and what happens if you do?'.

 

If a link has an * beside it this means that it is an affiliated link. If you go via the link, Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. The following link can be used if you do not wish to help Money to the Masses and do not wish to qualify for the cashback referred to in the article - LifeSearch