Switching life insurance providers: is it worth it?
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Key takeaways:
- A new policy means a new medical exam, which could lead to a higher premium.
- If you switch life insurance providers, you’ll face a new two-year contestability period.
- Switching to a new provider means you will have to pay the upfront fees again.
- Your current provider is likely able to convert, replace or supplement your existing policy to achieve coverage that meets your needs.
People may explore switching life insurance providers as their needs and circumstances change over time due to:
- Changes in financial priorities or coverage needs.
- Interest in policies with different features or structures.
- Options that may better align with current goals.
- Updates in personal circumstances, such as family or lifestyle changes.
- Exploring whether existing coverage still fits long-term plans.
Risks to consider before switching life insurance
1. New medical exam
Medical exams are a standard part of the life insurance application process.1 Unfortunately, you won’t be able to carry over the results from your existing policy to a new one. After all, the new provider will have to consider your current health status (along with your medical history). This means any new health issues could be taken into account, potentially leading to a more expensive policy. Or it’s possible a new company might even deem you uninsurable.2
2. A new contestability period
Switching providers means you’ll once again be beholden to a contestability period, which stipulates that if a policy holder passes away within the first two years of purchasing their policy, the insurance company has the right to investigate the claim before paying the beneficiary. Although unlikely, the carrier may be able to deny a claim outright or deduct any premiums they would have charged if they have reason to believe the information provided by the customer was incorrect. 3
3. Paying upfront fees (again)
Life insurance carriers often charge customers fees when they first issue a policy. You’re likely to face these upfront costs again should you switch providers. As you weigh these financial ramifications, bear in mind that it often takes time before the revenues you would receive from the policy outstrip these fees.4
4. Potential tax burdens
There’s always the chance that a change in your life insurance policy will result in new taxes. For example, if you transfer ownership of your policy to another party and name a third individual as the beneficiary, the payout will be viewed as a gift from the policy holder to the beneficiary and and will be liable for a gift tax. Moreover, if you decide to sell or surrender your original policy, the cash value might eclipse the policy value. In that scenario, the difference will be taxable.5
5. Possibility of policy conversion
Even if you’re unsure about your current life insurance policy, you don’t necessarily have to make a complete switch. Talk with your agent and see if it’s possible to replace or convert your policy. There may also be an opportunity to simply add a supplement to get the coverage you want. By going this route, you should be able to bypass a new medical exam and a contestability period.6
How to switch life insurance providers
If you’re considering a change, the process typically involves a few key steps.
1. Review your current policy
Take time to understand your existing coverage, including benefits, cost and any limitations.
2. Compare available options
Look into other policies to see how they differ in terms of coverage, features and structure.
3. Apply for a new policy
Complete the application process with the new provider, which may include providing personal and health information.
4. Wait for approval
Ensure the new policy is approved and active before making any changes to your existing coverage.
5. Evaluate your next steps
Once the new policy is in place, review how it fits with your needs before making any final decisions about your current policy.
This approach can help you move through the process with a clearer understanding of each step.
Frequently asked questions
Changing life insurance companies can take anywhere from a few weeks to a few months, depending on the new insurer’s underwriting process and how quickly you provide the required information. The timeline usually includes applying for the new policy, completing any medical exam or health review, waiting for approval and then activating the new coverage before canceling the old one.
Yes, many people hold more than one policy if the total coverage fits their needs and the insurer approves the application.
You usually need an application, proof of identity, health and medical information and possibly financial details depending on the policy.
There can be, so it’s best to wait until the new policy is approved and active before cancelling the old one.
It is the first two years of a policy, during which the insurer can review claims more closely if the insured dies.
Yes, some policies may involve new setup costs, administrative fees or higher premiums based on your current health.
Citations:
1 Policygenius: “Life insurance medical exam: What you need to know by Tory Crowley & Katherine Murbach, February 20, 2024 (updated) https://www.policygenius.com/life-insurance/life-insurance-medical-exam/
2 The Balance: “What You Need to Know Before Changing Your Life Insurance Policy” by Mila Araujo June 20,2021 (updated) https://www.thebalance.com/lifeinsurance-policy-2645784
3 Nerdwallet: ‘’ How to File a Life Insurance Claim’’ by Katia Pinkett, July 14,2025 https://www.nerdwallet.com/insurance/life/learn/life-insurance-claim
4 Nerdwallet: “Is Life Insurance Taxable?” by Katia Pinkett , May 16, 2025 https://www.nerdwallet.com/insurance/life/learn/is-life-insurance-taxable
65 The Balance: "What You Need to Know Before Changing Your Life Insurance Policy" by Mila Araujo, April 28, 2020 (updated) https://www.thebalance.com/lifeinsurance-policy-2645784
The information in this article is for educational purposes only and is not intended to provide legal, tax or financial advice. For guidance on your individual situation, please consult a qualified professional.
Insurance products are issued by: John Hancock Life Insurance Company (U.S.A.), Boston, MA 02116 (not licensed in New York) and John Hancock Life Insurance Company of New York, Valhalla, NY 10595.
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