Life Insurance Change Of Circumstances 2024

Elaine Brookes Steve Case

Author: Steve Case - Insurance Expert

Reviewed & Fact Checked By: Elaine Brookes

Updated: 22nd March 2024

change of circumstances life insurance

Life is full of surprises. You may have been happily married for 25 years, but life throws you an obstacle, and a family member dies from their life-long battle with cancer. It’s a sudden loss that leaves you without someone who has always been there for you.

But if you also lose your job at the same time, how will your family afford to live? This is where life insurance comes in handy—it can help provide financial security for those left behind after someone dies.

In this article, we will cover some of the most common life events that require life insurance changes and what they mean for beneficiaries on policy payouts. Life insurance change of circumstances is a subject the Insurance Hero team is often asked about.

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Divorce Proceedings

A divorce is a life-changing event that can significantly impact your life insurance policy. If you’re no longer married to the person named as the beneficiary on your life insurance policy, then it’s essential to update your policy information accordingly.

Otherwise, the payout from your life insurance policy may not go to who you intended it to.

Death of a Spouse

The death of a spouse is one of the most challenging life events you can experience. Not only do you have to cope with the emotional pain, but you also have to deal with the practicalities of life without your partner.

One such practicality is dealing with life insurance policies. If your spouse were the primary breadwinner in your household, you’d need to make some changes to your life insurance policy.

You may want to increase the coverage amount or add a secondary beneficiary.

Birth of a Child Or Adition To The Family

A new baby is one of the most joyous occasions in life. But it also comes with added financial responsibilities, such as paying for childcare and adding a new person to your life insurance policy.

When you have a child, it’s important to update your life insurance policy to ensure that your little one is cared for in case something happens to you.

Adding another person to life insurance is often overlooked or not thought about when life is calm and all seems right in the world. But life insurance should be one of the first things you think about when you have a child.

When you add a new person to your life insurance policy, it’s important to update your coverage amount so that they’re taken care of financially if something happens to you. Both new Mums life insurance and life cover for Dads are also available if you wish to consider these options.

Loss of Employment

A job loss can be a devastating experience, especially if it’s not through choice. When life throws you a challenge, it’s important to be prepared. If you’ve recently lost your job through no fault of your own, life insurance may play an important role in providing financial security for yourself and your family.

Securing a new job

A new job is a cause for celebration, but it can also lead to changes in your life insurance policy.

Suppose you’ve changed jobs and now work for a company that doesn’t offer life insurance. In that case, you’ll need to find an individual policy to ensure that your family is financially secure if something happens to you.

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Moving house/increasing your mortgage

Life events like moving house can also impact your life insurance policy, so don’t assume everything will stay the same.

If you’re moving to a new home and your mortgage increases, you must update your life insurance policy to reflect this change. Otherwise, you may not be fully protected if something happens to you.

How can you change your policy?

Changing your life insurance policy can seem daunting, but it doesn’t have to be. Most life insurers offer a range of options for policyholders, such as increasing or decreasing coverage amounts, adding secondary beneficiaries, and changing payment methods.

So, if you’ve recently experienced a life change, don’t hesitate to call your life insurer.

How much additional cover can you secure?

One way to prepare for the unexpected is to increase your life insurance coverage amount. This will provide you and your family extra financial security should life take a turn for the worse.

How much additional coverage you need will depend on your specific circumstances, but a good rule of thumb is to increase your coverage by at least the amount of your mortgage.

Can you change your policy term?

Another thing to consider when your life changes is whether you need to change the term of your life insurance policy.

If, for example, you have a young family and are now taking out a 30-year mortgage, it might be more appropriate to have a longer policy term. This will ensure that your loved ones are taken care of financially if life becomes more challenging.

Changing the beneficiaries of your life insurance policy

One of the best things about life insurance is that you can change your beneficiaries at any time. If something changes in your life – for example, if you get divorced or one of your children dies – you can easily update your policy to reflect this.

Joint life insurance policy

If you and your partner have life insurance policies, it’s a good idea to check whether they’re set up as joint or separate life policies.

This is important because if one of you dies, the other will only receive partial financial cover from their life insurer, which can be very costly when trying to maintain home loan repayments on an already grieving partner.

Can I take out more than one life insurance policy?

Yes, you can. The number of life insurance policies you can take out is unlimited, and it doesn’t matter how many life insurers you apply with—they’ll check whether you’re insurable before deciding whether or not to offer a policy.

This means that if there is any legitimate reason one life insurer won’t cover you, all is not lost. You may be able to secure life cover with another insurer.

What happens if I can’t pay my life insurance premiums?

If life becomes more onerous and your finances are put under pressure – for example, if you lose your job or have unexpected medical expenses – it’s important to know what life insurance options are available.

While life insurers will always try and make payment arrangements with their policyholders, they can’t force them (or anyone else) to pay the premiums on a life insurance policy.

So, if you’re struggling financially or find yourself unemployed, it may be worth considering taking out a reasonable level of life insurance that will still provide some protection for your loved ones.

Cancelling your life insurance policy

If life has taken a turn for the worst and you can no longer afford your life insurance premiums, it’s important to know what options are available.

Cancelling life insurance will leave you unprotected, so make sure that this is necessary before going ahead with it. If you’re cancelling life insurance because of financial hardship, then your life insurer will be able to help.

Changing your details on a policy

If you’ve moved house, got married, or had a child since taking out your life insurance policy, then it’s important to update your details on the policy.

This will ensure your life insurer has the most up-to-date information about you and can continue providing cover. Your advisor will help you make any changes without too much difficulty.

Do I need to tell a life insurance provider about a new condition?

If you become seriously ill and can no longer work, it’s essential to let your life insurer know as soon as possible. If you’re unable to continue making premium payments, they may be able to waive them for some time or even cancel the policy altogether without any penalties.

Do life insurance companies check medical records after death?

Yes, life insurance companies do check medical records after death. This ensures that no fraudulent claims are made concerning a life insurance policy.

What happens if I die before my life insurer pays out?

If you pass away and there’s no life cover in place for your dependents, they (or anyone else) will not receive any money from your life insurance policy. This is why it’s so important to have life insurance in place, as it will provide financial security for those you leave behind should the worst happen.

Insurance Hero can help with a change of circumstances regarding life insurance. Life insurance coverage is a valuable part of any financial plan.

If you need to change your existing coverage or want to begin new coverage for the first time, contact us today and one of our specialists will be happy to assist you with this process.