What if my life insurance needs change?
When you buy life insurance, your insurer wants you to remain a customer for many years. However, through those years, your life insurance needs may change.
That’s why it’s important to review your policy from time to time to ensure it still meets your insurance needs.
Some of the life events that may trigger a change in your needs are:
- Moving home or changing your mortgage
- Having another child or a child moving away from home or getting a job
- Sending your children to private school
- A change in the job or income of you or your partner
- Divorce or separation
Guaranteed Insurability Option
This is an option offered by most life insurance providers that allows you to increase your cover without the need for any further medical evidence, health questions or assessments.
You can usually exercise this option within six months of one of the following life events:
- You become a parent
- You get married or enter into a registered civil partnership
- You receive a salary increase due to a new job or promotion
- You increase your mortgage because you’re moving home or undertaking major home improvements
How much can you increase your cover with GIO?
Your cover can typically be increased by up to 50% of the original amount on each occasion that the option is used but this is limited to a maximum of £150,000. If the option is being used due to a mortgage increase then it’s also limited to the amount of the increase to the mortgage.
If you’re using this option because of an increase in salary, you can increase your cover by the same percentage as your salary increase - subject to the maximum of £150,000.
This option can be used three times in total over the life of your policy, but only once for marriage or registered civil partnership. The maximum total increase is £200,000.
For your policy to include the guaranteed insurability option, you must:
- Be accepted on standard terms and normal rates and;
- Your plan must have started before your 45th birthday and the option used before your 55th birthday.
There won’t be any more medical questions and the rates at the time of the increase will apply.
Other ways you can change your policy outside of Guaranteed Insurability:
- You can ask your insurer to increase or decrease the amount of cover you have
- You can ask your insurer to extend or reduce the period of cover
- You can remove a life that’s insured
- You can change your payments between annual and monthly
In certain circumstances you can separate your joint policy - these circumstances include:
- Your divorce
- The dissolving of a civil partnership
- Taking over an existing mortgage in one name
- Taking out a new mortgage in one name
Keep in mind that there are some limits to the changes that can be made and some changes may affect the amount of premium that you must pay.