How to Switch Life Insurance Policies | Finder Canada

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Switching life insurance policies

It might be time for a new policy if your term life insurance has expired or your needs have changed.

Young couple looking at life insurance documents together

As your life changes, so might your life insurance needs. If your family has grown, you may need to add more coverage or beneficiaries to your policy. Approaching retirement age? You might want to use your policy for cashflow. However, changing your policy to shop around for a cheaper rate can be more trouble than it’s worth – plus, you could end up paying more with a new policy.

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How to switch life insurance policies

Switching out your life insurance policy from term-life to whole life or vice-versa is actually a lot more straight-forward than most people would assume.

Here are the steps to take to switch your policy

  1. Figure out how much coverage you need
    If you lifestyle has changed — the addition of more children, or adult children are independent — your life insurance needs change. Take into account your current expenses to make sure your loved ones are protected.
  2. Purchase your new policy
    Before canceling your existing policy, make sure you’ve purchased a new plan. Most new policies require a medical exam and there’s a chance you might not qualify for the amount of coverage you need.
  3. Cancel your existing policy
    Once your new policy is in place, cancel your existing policy. If you have a whole life policy and stopped paying your premium, you could be missing out on some money. Look for your accrued cash value for a payout when you cancel your policy.

Why do people change their life insurance policies?

Reasons people switch life insurance policies include:

  • Reaching the end of term. Once your term is up, your level premium could raise to the new term, or you’ll be given an option to roll it over to a permanent policy — or let it lapse completely.
  • Change in circumstances. As you grow your family or consider your life after retirement, you need to adjust your life insurance policy to meet the needs of your beneficiaries.
  • Financial reasons. If your premiums are too expensive as you get older and develop health issues, you may be looking to buy less life insurance.

What should I consider before I switching?

If you switch life insurance policies, you’ll most likely have to take a medical exam. Consider these other factors before you decide to switch:

  • Higher premiums. As you get older or you have changes in your health, your premiums can increase.
  • Long waiting period. Often, there is a fairly long waiting period — about a year or two — before you can make a claim on your new policy which could be a concern for some people.
  • Reputation. Do your research to find out more about the company’s financial stability, customer service and how easy it is to make a claim. You also want to check that the insurer is licensed to sell insurance in your province or territory.

What information will I need to switch to a new insurer?

To switch your policy, expect to provide:

  • Current life insurance number
  • Insurance carrier
  • Expiration of current policy

If the insurer you’re switching to is not transparent, acts shady or seems unprofessional, you’re better off staying away to save yourself a headache.

Can I have two life insurance policies at once?

Yes. There are many reasons why you might want multiple life insurance policies. However, it can be an expensive way of getting the coverage you need. If you can find a way of having one life insurance policy to look after all your needs, you should be able to find the same amount of coverage for a cheaper price.

What should I consider when buying multiple life insurance plans?

  • Managing. Although having multiple life insurance plans in place can offer greater security, it can also cause more confusion and become difficult to manage. The more life insurance plans you have, the more time you’ll have to put into managing and reviewing them.
  • Cost. Multiple life insurance plans come with multiple premiums to pay, which can be costly in the long-term.
  • Time. You’ll have to dedicate more time not only to find suitable plans and providers but also reviewing and checking that your life insurance plans and coverage are up-to-date and fit your needs.

Tips for switching to a new policy

If you’ve done the research and have decided that your old policy won’t cut it anymore, there are some strategies you can use to make the process as smooth as possible. Here are some tips to save you time and money:

  • Don’t cancel your old policy until your new policy is in effect.
  • Calculate the cost of your new policy to make sure that when all is said and done with making the switch — commission, fees and any other upfront costs — that your new coverage will be less expensive and offer competitive coverage.
  • Ask the insurance provider if there will be any tax consequences or surrender fees when dropping your old policy. If there is, check that the cost won’t make switching to a new policy more expensive.

Find a new life insurance provider today

Name Product Types of Insurance Coverage Range Issue Ages Medical Exam Required Province Availability
RBC Life Insurance
Term Life
$50,000 - $25,000,000
18 - 75 years old
No
Ontario, Alberta and Manitoba
Select from two unique RBC term life insurance plans to get flexible and affordable coverage that suits your lifestyle and budget. Get a free quote through PolicyAdvisor.
PolicyMe Life Insurance
Term Life
$100,000 - $5,000,000
18 - 75 years old
No
Alberta, British Columbia, Manitoba, Nova Scotia, Ontario and Prince Edward Island
Get fast and affordable term life insurance without the need for a medical exam with PolicyMe.
Manulife Life Insurance
Term Life
$100,000 - $1,000,000
18 - 70 years old
No
Ontario, Alberta, Manitoba
Manulife's CoverMe Term life insurance is simple and straightforward coverage that suits your lifestyle and budget. Get a free quote through PolicyAdvisor.
Empire Life Insurance
Term Life
$50,000 - $10,000,000
18 - 75 years old
No
Ontario, Alberta and Manitoba
Empire Life offers affordable, flexible term life insurance coverage and can provide lifetime coverage if needed. Get a free quote through PolicyAdvisor.
BMO Life Insurance
Term Life
$100,000 - $5,000,000
18 - 75 years old
No
Ontario, Alberta, Manitoba
BMO Term life insurance provides you with coverage for 10, 15, 20, 25 or 30 years. Get a free quote through PolicyAdvisor.
Desjardins Life Insurance
Term Life
$50,000 - $10,000,000
18 - 75 years old
No
Ontario, Alberta and Manitoba
Desjardins offers a number of different term life insurance options to cover fixed-term needs including lifestyle protection and mortgage coverage. Get a free quote through PolicyAdvisor.
Wawanesa Life Insurance
Term Life
$50,000 - $10,000,000
18 - 75 years old
No
Ontario, Alberta and Manitoba
Wawanesa offers simple and straightforward term life insurance coverage. Choose from single and joint coverage options. Get a free quote through PolicyAdvisor.
Canada Life Insurance
Term Life
$100,000 - $10,000,000
18 - 75 years old
No
Ontario, Alberta and Manitoba
Choose from 4 different term life insurance options from Canada Life. Get a free quote through PolicyAdvisor.
Canada Protection Plan Life Insurance
Term Life
$50,000 - $1,000,000
18 - 70 years old
No
Ontario, Alberta, Manitoba
Canada Protection Plan's Preferred Term life insurance is suitable for those in good health. Get a free quote through PolicyAdvisor.
Assumption Life Insurance
Term Life
$50,000 - $4,000,000
18 - 75 years old
No
Ontario, Alberta, Manitoba
Choose from five different term life insurance plans with Assumption Life. Get a free quote through PolicyAdvisor.
Sun Life Go Simplified Term Life Insurance
Term Life
$50,000 - $100,000
18 - 69 years old
No
All of Canada
Sun Life Go Simplified Term Life Insurance covers you for 10 years, during which time your premiums are guaranteed not to rise. Apply for up to $100,000 in coverage.
Sun Life Go Term Life Insurance
Term Life
$100,000 - $1,000,000
18 - 69 years old
No
All of Canada
Sun Life Go Term Life Insurance is a standard term life insurance option that guarantees your premiums in the first 10 or 20 years of your policy.
Sun Life Go Guaranteed Life Insurance
Whole Life
$5,000 - $25,000
30 - 74 years old
No
All of Canada
Permanent life insurance coverage that guarantees fixed premiums until 95 years old (and no premiums thereafter).
 Life Insurance Through PolicyAdvisor.com
Whole Life, Term Life, Universal, No Medical
$25,000 - $5,000,000
18 - 75 years old
No
Alberta, Manitoba, Ontario
PolicyAdvisor is a digital life insurance brokerage that has partnerships with 20 insurers in Canada.
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Bottom line

If you’re considering changing your life insurance policy, make sure you have the coverage you need and compare the compare life insurance policies for your needs.

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