Can you really change your life insurance policy within a year if you wanted to?

Can you really change your life insurance policy within a year if you wanted to?

Well, the answer to this question is not really a straight forward “yes” or “no”. Let me try and explain. These days many insurance brokers push customers into signing at least a 2 years contract to prevent them for changing or cancelling their policies within that time period and should they still choose to cancel or swap it, they must pay a penalty (it’s not a set amount, every broker would charge a fee according to what they deem fit). The reason why they tend to this is because they end up losing a big chunk or all of their commission should you change or cancel your policy within the first two years. As an industry insider I can tell you it’s a pain in the back side for them bearing in mind the amount of work that goes into setting up a policy which obviously a customer wouldn’t know.

You, as a customer, can obviously say a no to signing that contract and perhaps go elsewhere for a policy, that’s entirely your prerogative. However, whether that signed agreement (if you do decide to sign it) stands a chance in the court of law is still controversial. The providers can’t certainly tie you up in any such contracts because it’s not legal, but whether or not these broker agreements are legal or carry any weight-age is still a question mark.

Obviously if you can’t afford that policy any-more due to a sudden change in circumstances, it’s unfair for any broker to penalise you & like I said under these circumstances whether or not they can penalise you is also a question mark.

In my opinion though, contract or no contract, I feel it’s only fair for you to get in touch with your own adviser, who’s perhaps put in so much efforts into finding you the policy best suited to your needs, if you had a change in your circumstances or someone offered you a better price.

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