5 things to know before changing your life insurance policy

Published on November 30th, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Restarting the medical examination process

Some life insurance providers will allow you to increase or decrease the level of cover you get, but you will have to clear this with your insurer first. It is possible during the adjustment process you will be requested to undergo new health checks to make sure that you get an up to date policy. If your insurer doesn’t allow you to alter the level of cover then you will have to look for a new insurer by shopping around and comparing for the best deal.

Have you considered a top-up policy?

Your life insurance policy could be lacking in some areas, but don’t be too quick to dismiss it. You could use a top-up policy, to supplement your existing one, from another insurer. Before cancelling your life insurance, you will have to consider how this will affect your family. Cancelling outright can be detrimental to their future. Rather look for other options that are available to cater towards your needs.

Know when it’s the right time to change your life insurance

Life is unpredictable, and we all have different reasons why we choose to change our life insurance policy to adapt to the times. If your financial needs change then you could find yourself wanting to look for a more affordable plan that won’t cause a strain on your income. It’s advisable that you consult with a reputable broker or your existing insurance company to see what other options are available for you before leaving.

Anticipate higher initial premiums

When making the switch you might soon realise that the new life insurance policy premiums are higher than you expected. This could be due to commission and sales that are worked into the price. When making a claim on your new policy you might also find that there is a longer waiting period. These are the many features that you will have to consider before making the switch to a new policy provider.

Don’t be quick to sign with a new insurer

Life insurance plays an important part in any one’s life, and you will have to take time considering your next move. Even if you are pressed financially don’t be too quick to jump ship to another insurer, as there are faux insurers who are looking to make a quick buck out of you.

Red flags that should make you steer clear of your new insurer are:

  • They want you to sign an incomplete contract.
  • They do not take you through a step by step process that helps you understand both the cover and contract properly.
  • The bad mouth other companies or insurers.
  • They are not an accredited provider.

Doing adequate research on the extra fees that come with changing your policy is important. Consider the features that come with it and whether if it is worth moving to a new policy.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

Savvy is partnered with Compare Club Australia Pty Ltd (AFS representative number 001279036) of Alternative Media Pty Ltd (AFS License number 486326) to provide readers with a variety of life insurance policies to compare. Savvy earns a commission from Compare Club each time a customer buys a life insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via Compare Club.

Savvy does not compare all life insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.

For any further information on the variety of insurers compared by Compare Club or how their business works, you can read their Financial Services Guide.

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