Should I change my life insurance policy?

A young man contemplates if he should change his life insurance policy after reading SelectQuote's resource article

There are a number of reasons you might be considering changing your life insurance policy, such as finding a more affordable option or needing to add a beneficiary, but there are a number of factors you should consider before you change life insurance. At SelectQuote, we can help you explore your options and determine if switching policies is right for you.

7 Reasons to Change Your Life Insurance Policy

Life happens and it’s not uncommon for individuals to consider switching life insurance policies. Some of the main reasons you might be thinking about changing your life insurance policy include:

  1. Finding a cheaper policy
  2. If you find that your premiums are too expensive for your budget, you could shop around to find a similar coverage for a more affordable price. Whether your health has improved, you’ve lost weight or quit smoking, these are all factors that could help you secure a cheaper policy.

  3. Big Life changes
  4. Going through big life changes may have you considering adjusting your life insurance policy. Potential life changes could include:

    • Getting married
    • Having children
    • Buying a house

    These life changes may require more life insurance coverage and you’ll want to shop around to find the most affordable rate.

  5. Needing to change or add a beneficiary
  6. Changing or adding a beneficiary shouldn’t be the sole reason you switch your life insurance policy, but an increase in the number of beneficiaries you would like your death benefit paid out to may require more coverage or consideration of a new type of policy.

  7. Finding out there might be a better policy type for you
  8. Whether you have term life insurance and would like the cash value option from a whole life insurance policy, or you have whole life insurance that is a bit too expensive for your coverage needs, both are reasons to consider switching life insurance policies.

  9. Change in financials
  10. Any changes to your finances should prompt you to take a look at your life insurance policy. Here are some common examples:

    • A promotion at work
    • Buying a house
    • Getting married
    • Expanding your family

  11. Interested in cash value or borrowing from your life insurance policy
  12. Term life insurance does not build up a cash value and therefore does not allow you to borrow from the policy. A main benefit of permanent life insurance policies is the cash value that accrues at a specified rate each time you pay your premium.

  13. Employer provided life insurance isn’t providing enough coverage
  14. Life insurance through your employer is a great start for getting affordable life insurance , but it is often limited in coverage. Life insurance through your employer also only covers you while you’re an employee at that company, making it a smart idea to purchase your own policy.

As the policyholder, you’re in control of your life insurance choices, but there are a number of factors to consider before changing your life insurance policy.

Tips You Should Know Before Changing Life Insurance Policies

There are a few things you need to consider before changing your life insurance policy:

  • You may have to take another medical exam, and your results may cause higher premiums. Additionally, life insurance is more expensive as you get older.
  • The cost involved while changing your policy
  • The incontestability clause is standard among life insurance policies, and it means that the death benefit may be denied or contested in the first two years of your new policy. This clause no longer applies if your current policy is more than two years old.
  • Tax advantages or consequences from both your current policy and potential new policy.

Before you switch your life insurance policy, you should check with your carrier and see if there’s a way to adjust your existing policy. This could help prevent upfront fees, tax consequences and a potential waiting period. Depending on benefits and coverage, the price of a new life insurance policy could also be more expensive. These are all factors to take into consideration before you decide if changing your life insurance policy is right for you.

If you’re unsure where to start, our life insurance calculator can help you determine the right amount of coverage for you.

How can I switch my life insurance policy?

The process of switching your life insurance policy consists of:

  • Determining the type of policy you want and how much coverage you need
  • Purchasing your new life insurance policy
  • Canceling your existing life insurance policy

Whether you’re trying to adjust an existing policy, looking for new coverage or are interested in learning more about converting term life insurance to whole life insurance, we can help.

Can I switch life insurance companies?

It’s possible to switch life insurance companies, but it’s important that you buy your new life insurance policy before you cancel your current one. You’ll want to work with a licensed insurance agent to make sure the process goes smoothly and to avoid any gaps in coverage.

If you’re interested in looking at other life insurance companies, SelectQuote can help. We can shop several of the most trusted insurance companies to find the best rates and coverage for you.

Shop Life Insurance Policies and Find the Right Replacement for You

At SelectQuote, we can help you consider all your life insurance options and determine the right coverage for you. We can provide you with free life insurance quotes and compare rates from some of the most trusted insurance companies on your behalf in just minutes.

We do the shopping. You do the saving.