Life Insurance – What Happens If My Circumstances Change?
If you have already taken the necessary steps to secure a financial future for your family with life insurance, then kudos.
However, throughout life, circumstances change and these changes can affect how much you pay for your life insurance policy. Because of this, it’s important to keep your insurer updated.
The last thing you want your family to endure after losing a loved one is to have their life insurance claim rejected because of inaccurate information.
With that in mind, we’ve created this short guide so you’ll have all the relevant information you need before updating your life insurance policy.
Why do I need to update my life insurance if I have a change of circumstances?
It’s crucial to inform your insurer of any changes to your circumstances as this could affect the amount you are charged for your policy as well as the amount your family would receive if you were to die.
If you neglect to let them know of a change and your family later make a claim against your policy, it could be rejected on the grounds of non-disclosure, leaving your family with nothing.
When you take out life insurance, the provider will ask you questions about your health and medical history to determine how likely it is that they’ll need to pay out on a future claim.
Usually, if you have a longer life expectancy and good overall health, your premiums will be lower since insurers will deem you less likely to pass away and require a payout.
It may be the case that when you initially took your life insurance policy out, your circumstances were different to what they are now.
What changes do life insurance companies need to know about?
Below are a list of questions to regularly ask yourself if you have a life insurance policy. If the answer is yes to any of these, most experts would recommend contacting your insurer.
- Have you taken up smoking?
- Have you quit smoking?
- Have you been diagnosed with a critical or ongoing illness?
- Have you gained or lost a significant amount of weight?
- Are you pregnant?
- Have you had a child or additional children?
- Are you married?
- Are you divorced?
You’re not legally obliged to disclose any change of circumstances, as the policy was taken out and agreed on the original application. As stated, it’s best to say something. Premiums shouldn’t change, and you remove the risk of policies not paying out from non-disclosure.
Changing circumstances may mean your premium should fall. Again this may not happen, but you might be able to replace the policy with one from a different provider at a lower premium.
If you feel unsure about whether or not you need to update your insurance because of a change in circumstances, ask one of the life insurance experts we work with. Call 0808 189 0463 or make a quick online enquiry.
Will I need to switch providers?
Not necessarily, though there are some scenarios where this might need to happen.
It’s possible that because of an improvement to your lifestyle and health, your insurance company could decrease the price you pay for your insurance.
However, keep in mind that if your health has deteriorated or your life expectancy has decreased, the price of your premiums could increase.
In a handful of cases, where a change of circumstances is significant, the insurance company may decide that because of the increased risk of death, they can no longer provide life insurance for you.
If this happens, contact an insurance advisor who can help you find sufficient cover elsewhere.
Using their knowledge of the insurance sector, they can scour the market to find alternative providers that are more likely to accept you as a customer.
The advisors we work with are on hand to answer all your queries. Call 0808 189 0463 or make a quick enquiry.
Can an insurance advisor find me cheaper life cover?
One of the great things about working with an insurance expert is that because of their experience, they’ll be aware of the insurance companies that provide cover for lower prices.
Bear in mind that cheaper isn’t always best because the price you pay can reflect the level of cover you receive, as well as the amount of the payout your family could be entitled to.
However, if there’s another life insurance company that can offer the same level of cover or a better level of cover for a cheaper price, the advisors we work with will find it.
Speak to an expert advisor
If you’re unsure about how to update your life insurance policy after a change of circumstances, seek independent insurance advice today.
The advisors we work with can compare life insurance quotes from across the UK to determine which policy could provide you with the best level of cover for the lowest price.
Call 0808 189 0463 or send your questions directly to an advisor who can help.