I Think I Partnered with the Wrong Life Insurance Company. What Do I Do?

life insurance agent

Life insurance policies help policyholders provide for their families financially after they leave this world. Like property and vehicle insurance, life insurance gives policyholders comfort by ensuring their loved ones are provided for financially in the event of their untimely demise. Life insurance consumers may occasionally consider changing insurance companies in search of alternate policy terms or higher levels of protection.

If you want to change your life insurance company, there are a few things you need to do first. However, before making such a drastic move, it’s a good idea to consult with the customer care department of your existing life insurance provider or insurance broker to see whether your current plan can be modified to suit your needs better.

Certain term life insurance plans, for instance, will let you convert to a different kind of permanent coverage, like whole life, provided you do it before the policy’s expiration date. On that note, let’s take a detailed look into some risks of switching life insurance companies.

Why Is It Important To Weigh The Benefits & Risks?

Switching life insurance companies could be the key to revitalizing a stagnant investment portfolio. If your financial situation has changed due to a shift in your income, assets, or spending habits, this method might help you identify a better strategy. If you discover a reliable life insurance company, they may be able to point you in the direction of options that are more suitable for your situation.

However, it’s vital to understand the dangers associated with switching life insurance companies. In the worst-case scenario, you might not be able to purchase life insurance at all. Costs and availability of services may increase if you change providers. Before switching life insurance companies, consider these three concerns.

1. Higher Premiums

Since insurance premiums tend to increase with age, switching to a new company when you’re already an adult may result in higher monthly payments. Think about how your policy choices will affect your tax situation. There are pros and downsides to transferring from your current life insurance carrier to another company for either term or whole life coverage.

life insurance broker

A lower premium can be expected if you downsize your term life insurance plan from 30 to 20 years. However, by doing so, you will also reduce the duration of your insurance by ten years, which may become significant down the road.

1. Coverage Gaps

The life insurance terms and coverage choices offered by many insurers are standardized. Perhaps the only difference between them and the rest is their names, yet some are truly unique. The assistance of an insurance professional could prove invaluable in this situation. Check to see that the new policy provides the same levels of protection.

Ensure that you comprehend any changes to your policy’s coverage. You should feel at ease with any transitions you make. Life insurance policies are regularly revised and revised frequently by life insurance companies. In many cases, the coverage and premiums for older insurance are better overall.

That’s why it’s important to learn about the ‘real cash value’ rules of various service providers. However, the policies of some insurers provide protection solely for replacement costs minus a specified number of years’ worth of depreciation.

2. Consequences Of Switching Life Insurance Companies 

Keep in mind how long you’ve been with your present insurance provider. One question commonly asked by life insurance companies is how long you were previously covered by the life insurance company.  You probably won’t obtain the best prices if it’s less than two years. This is due to the fact that several competing life insurance companies consider the length of service with your previous provider as a parameter for premiums.

If you’ve worked with the same life insurance provider for at least ten years, you may be able to negotiate a better rate. Nonetheless, consider the following case. The new insurance company might not suit your needs, so you might look for another one. Since you were only with the last firm you didn’t like for a limited time, you may expect to pay more this time. That’s why it’s important to carefully choose a life insurance company.

getting life insurance

If you’ve decided to switch your life insurance company after considering the risks, then Franklin Life & Annuity should be your go-to option. Whether you want family life insurance or final expense insurance in Houston, Texas, we have it all. Call us today to learn all about it.