Switching life cover to save money

Most of us are familiar with the principle of switching gas and electricity supplier to save money. You can also change telephone provider and switch credit cards quite easily for a cheaper rate.

But have you thought about whether you should change life assurance companies?

With your gas supplier you could switch to the cheapest supplier who then one month later puts their costs up making the exercise a bit pointless. Fortunately, most life cover policies have guaranteed premiums. This means that once your policy starts the premiums are guaranteed not to change for the life of the policy. A bit more predictable for you.

So lets say you have a current life policy that costs £50 per month. If you were to switch cover on a like for like basis at £45 per month you have a guaranteed saving of £5 each and every month until the policy ends. If your policy runs for 15 years then you will save a total of £900.

Now there are a few things to watch out for when considering change life cover provider.

1. Do not cancel your policy until the new one is set up. It can take several weeks for a new term assurance policy to be set up. The insurance company may write to your GP or may ask you to go for a medical.

2. Changes to your health. If you have suffered medical problems since taking out your policy then any new cover may be more expensive as the insurance company will need to know details of your medical history.

3. Match the policies on a like for like basis. Match the amount of death cover and the remaining number of years left on the current policy.

4. Don’t forget to include any policy options that you might currently have such as critical illness or premium waiver.

To ensure you get all these points right, consider asking an Independent Financial Adviser to do the work for you. They will cover all the above points as well as seeking out a competitive term assurance policy with a good company. Then you can rest easy that you have done the right thing by switching insurance companies, have saved money and have the cover you and your family need.