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Should I Switch Life Insurance Companies?

December 27, 2021
Our goal is to educate and advise on life insurance options, so you can feel confident in making the right choice, whether that’s through Quotacy or somewhere else. To ensure we provide accurate and trustworthy information, our writers follow strict editorial standards.

Have you owned your life insurance policy for some time and are wondering if it’s time to make a change? There are pros and cons to switching life insurance companies and buying a new life insurance policy.

In some cases, it makes sense to switch life insurance companies. Read on so you know the facts.

Rate Changes with a New Life Insurance Policy

Life insurance is an extremely competitive industry. Life insurance rates now are cheaper than they were ten years ago.

If you bought your policy quite some time ago, the same policy may have lower premiums today.

However, you need to be careful. Your age plays a big role in the cost of a life insurance policy. The older you are, the higher the life insurance premiums are. A new policy would mean rates are given based on your current age.

Your health also plays a big role. Have you been diagnosed with any health issues since you first purchased your policy? If so, the rates of a new policy are likely to reflect this.

Do not cancel a current life insurance policy before buying a new one. If you want to buy a new one in order to terminate your current one, wait until everything is inforce (active).

You may wind up with nothing if you cancel your current one too soon and then come to find out your new rates are unaffordable or, worse, you’re now uninsurable.

It’s free to apply for a new life insurance policy. Find out how much it will end up costing you, and then decide if you want to switch life insurance companies and go with the new policy.

A New Medical Exam with a New Life Insurance Policy

You likely had to get a medical exam done with your current policy. You cannot use those lab results for a new policy.

If you want to switch life insurance companies, the new insurer will want a current health report on you. If there are any health issues, this may lead to a more expensive policy.

However, there’s also a chance you got healthier! Did you quit smoking? Lose weight? Get your blood pressure under control? Life changes like these may mean you can qualify for a more affordable policy.

In addition, many life insurance companies now use an accelerated underwriting process. You need to qualify for this, but, if you do, you can skip the medical exam.

Apply and find out if you qualify. If you’re a relatively healthy person, you may be able to skip the medical exam and find more affordable rates than you’re paying now.

See what you’d pay for life insurance

Comparison shop prices on custom coverage amounts from the nation’s top carriers with Quotacy.

A New Contestability Period with a New Life Insurance Policy

You may or may not remember that your current policy came with a contestability period. This is a two-year period that starts immediately once your policy is activated.

If one dies during this two-year contestability period, the insurance company has a right to investigate the death claim before paying the beneficiary the death benefit. If they find proof that the applicant misrepresented themselves on the application, the insurance company may be able to deny a claim outright or deduct a certain amount before paying it.

Buying a new policy or switching life insurance companies restarts this contestability period.

Why is it you want to switch life insurance companies? Is it to find lower pricing?

Unlike your cable or phone plan provider, the insurance company cannot lower your premiums as an incentive to stay with them. Life insurance rates are regulated by the individual states. Even if your current insurer wanted to, they cannot lower the rate of your current policy. But you could re-apply with your current insurer to see if you find lower pricing.

Because the industry has gotten so competitive, the cost the policy you currently have may now be cheaper. You’d have to re-apply to find out if you qualify for lower rates.

There’s also a good chance that you’d find lower pricing through a different insurance company, due to how competitive they all are. To find the lowest rate, we recommend applying through a life insurance broker, like Quotacy.

A broker is not employed by a specific insurance company, but works with many different ones. Because of this, they are able to offer you products from many different companies.

A huge benefit to this is being able to comparison shop pricing in one place; versus applying from company to company.

Why is it you want to switch life insurance companies? Is it because your policy is expiring soon?

Term life insurance policies are common and great options for families. But maybe you purchased one and the term is expiring soon and you’re realizing you may want to be insured for a longer time.

Your current term policy likely includes conversion and renewability options. If you want to continue your coverage due to the fact that your health is failing, choosing one of these options, instead of switching insurance companies, may be in your best interest.

What’s the conversion option?

A conversion option allows you to change your term policy into a permanent policy, without needing to prove you’re still insurable. This means no medical exam and no other medical questions to answer.

Your premiums will increase when you convert due to the fact that you’re older in age and you’re now getting permanent coverage. Permanent coverage is more expensive than term coverage.

What’s the renewability option?

A renewability option allows you to continue your same term coverage for another year. However, renewable premiums are much higher than your fixed original term policy premiums. And every year you opt to renew, your premiums will increase.

Buying a Brand New Policy

If your term coverage is ending soon and you want more coverage, if your health hasn’t severely declined, chances are you can buy a new policy.

One bonus of applying for life insurance is that you’re not obligated to purchase it once you receive your final offer from the insurance company.

However, if you’re in the market for a new life insurance policy, let Quotacy help. As a broker, we have access to multiple insurance companies and we’re your advocate. We don’t work for any insurance companies.

You can get quotes on Quotacy without handing over any contact information. Comparison shop pricing from many companies on our website in peace.

When you’re ready to apply, the online application only takes a few minutes. You’ll be assigned a dedicated agent who will review your policy and make sure you’re matched to the company that will offer you the best pricing, based on the risk factors noted on your application.

Be as honest as possible upfront when completing your application on our website. This helps your agent make sure you’re matched with the best insurance company right away.

Once your application is submitted to the insurance company, if they come back with an offer that’s higher than your initial quote, your agent will go to the other insurance companies we work with to determine if anyone else would be willing to offer a better rate. This service is no added cost to you. We just want to make sure you’re getting the best policy on the market.

Your agent will keep you updated every step of the way. You can choose to accept the final coverage offering or walk away.

Switching life insurance companies can be a good thing. It pays to comparison shop. Quotacy can help. Get instant term life insurance quotes today.

1 Comment

  1. StudyConnexion

    As the policyholder of your life insurance policy, you are in control of your life insurance policy choices.


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