What to consider before changing a life insurance policy
Quick answer
If your life insurance needs change, you may want to review your existing coverage and understand the options that may be available under your policy or through other coverage. Depending on the circumstances, options may include maintaining existing coverage, reviewing available conversion options, applying for additional coverage, or applying for different coverage. Applying for new coverage may include health questions, underwriting, or a medical exam depending on the coverage.
Before replacing an existing policy, it can be helpful to compare the coverage, premiums, policy features, underwriting requirements, and other provisions of both policies. Keeping existing coverage in force until replacement coverage is approved and active can help avoid a gap in coverage.
Why might you review your life insurance coverage?
Changes in financial responsibilities or coverage needs may lead you to review an
existing life insurance policy.
Reasons for reviewing existing coverage may include:
- Changes in the amount of coverage needed
- Interest in a different type of life insurance
- Changes in financial responsibilities
- Employer-sponsored coverage that is ending
- Different policy features or premium structures
Reviewing existing coverage does not necessarily mean it needs to be replaced. Comparing the current policy with other available options can help clarify the differences.
What should you know about replacing existing coverage?
A new life insurance policy may have different costs, benefits, requirements, and features
than existing coverage.
When reviewing existing and potential coverage, differences may include:
- Premiums
- Death benefit and coverage amount
- Policy type and duration
- Riders and other policy features
- Cash value, if applicable
- Underwriting requirements
- Policy guarantees
- Conversion options
Eligibility, premiums, and policy features vary by insurer and product.
Understanding replacement and conversion
Replacing a life insurance policy generally means applying for new coverage.
Converting an eligible term life insurance policy is different. Some term policies allow eligible policyholders to convert to permanent coverage during a specified conversion period without providing new evidence of insurability, subject to the terms of the policy.
Conversion options, eligibility requirements, deadlines, and available coverage vary by policy.
For more information about exchanging term coverage for permanent coverage, see All about exchanging your term life insurance.
Understanding changes to existing coverage
Applying for a replacement policy does not mean the new coverage is immediately
active. A new application may require underwriting or additional review, and approval is
not guaranteed.
Ending an existing policy before replacement coverage is approved and in force could result in a gap in life insurance coverage.
A replacement policy is also a new contract. Certain policy provisions may begin again according to the new policy's terms and applicable state law.
Frequently asked questions
Can I apply for life insurance from a different company?
In many cases, you can apply for a new life insurance policy from a different insurer.
Eligibility and approval requirements vary by insurer and product.
Could a new life insurance application require a medical exam?
It depends on the policy. Some life insurance policies require medical underwriting or a
medical exam, while others may not.
What options may be available if I have term life insurance?
You may be able to apply for permanent life insurance to replace term coverage. Before
replacing an eligible term policy, review whether it includes a conversion option that may
allow you to convert to permanent coverage.
What happens if I'm not approved for new coverage?
If an application for replacement coverage is not approved and the existing policy
remains active, existing coverage generally remains in place according to its terms.
Can you have more than one life insurance policy?
It may be possible to have more than one life insurance policy. The amount and types of
coverage available depend on factors such as underwriting requirements and insurer
guidelines.
Bottom line
If your life insurance needs change, reviewing your existing coverage and understanding
the options available can help you identify important differences in premiums, benefits,
underwriting requirements, and policy provisions.
Options and availability depend on the policy, insurer, and individual circumstances. If new coverage is being considered, existing coverage and any available conversion options should also be reviewed. Ending existing coverage before new coverage is approved and in force could result in a gap in coverage.
