Switching life insurance policies

It might be time for a new policy if your term policy is ended, or if your finances, health or lifestyle have changed.

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As your life changes, so might your life insurance needs. If you’ve grown your family, you may need to add more coverage or beneficiaries to your policy. Approaching retirement age? You may 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 — and 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.

Find a new life insurance provider today

Name Product Issue Ages Coverage Range Medical Exam Required State Availability
18 - 85 years old
$10,000 to $10,000,000+
Depends on provider and policy
All 50 states
Compare quotes from 16 life insurance companies side by side.
18 - 75 years old
$100,000 to $10,000,000
Get a term life insurance quote from this A+ rated company, founded in 1875. Customize your policy with additional life and disability riders.
18 - 64 years old
$100,000 to $3,000,000
All 50 states
Customized term life insurance policies up to $3 million, no medical exam required.
20 to 60 years old
$100,000 to $8,000,000
Not available in New York
Term life insurance with no policy fees and the freedom to cancel anytime. Simple application process that can get you approved for coverage instantly.
25 - 60 years old
$100,000 to $5,000,000
Available in all states except for Montana
Offers term life insurance with accelerated underwriting. No-exam coverage up to $1,000,000 for those who qualify.
20 - 80 years old
$25,000 to $10,000,000
All 50 states
Quickly get a quote for coverage with this marketplace, which compares term & whole life insurance policies from 45+ carriers.
20 - 85 years old
$100,000 to $1,000,000
Depends on policy
All 50 states
Get a term or whole life insurance quote from Fidelity Life - starting as low as $15/day.
18 - 80 years old
$50,000 to $25,000,000
Depends on provider and policy
All 50 states and D.C.
Get a quote within minutes from more than a dozen insurers.
21 - 54 years old
$50,000 to $1,000,000
Not available in Alaska or New York
Affordable 2-, 10- and 20-year term life insurance policies. Instant quotes and no medical exams.
25 - 83 years old
$25,000 to $1,000,000
Depends on policy
Get a term life quote from eCoverage - starting at as low as $15 per month.

Compare up to 4 providers

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, if customer service and ease of making a claim. You also want to check that this company is licensed to sell insurance in your state.

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.

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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