Replacing cover.

Thinking of replacing your existing cover?

Here’s what to consider before you make any changes.

Replacing your life insurance policy might seem like a good idea — maybe the premiums look cheaper, or you’ve seen a new offer. But there are important things to think about before making any changes. Below are key areas to check, so you can be confident your new policy will meet your needs.

Personal situation.

Has anything changed since you first took out your policy?
When you apply for a new policy, you’ll need to go through the full application process again — this is called the underwriting process and it includes health and lifestyle questions. If your personal situation has changed (such as your age, health, job, or hobbies), this could affect what the new insurer will cover or charge.

Cover.

You may not be getting the same protection.
Your current policy might include features or benefits that are no longer available in other products. It’s important to check whether the new policy covers the same things — and to understand any differences. You could be giving up valuable benefits, or getting great new ones by changing.

Medical conditions.

Previous conditions may not be covered in the new policy.
Even if your current policy covers a medical condition, that doesn’t mean the new one will. If your health has changed, the insurer may:

• Add exclusions for certain conditions.
• Increase your premium.
• Or be unable to offer you cover altogether.

Make sure to disclose all of your requested health history in the application for the new cover.  This will allow the new insurer to more accurately assess your application and so lessen the chance that a future claim can’t be paid because of a condition that wasn’t disclosed at application time.  If you are unsure, it’s important that you let the new insurer know that you’re not quite sure and they’ll help you to work through it.  

Stand downs.

You might not be covered straight away.
New policies often have stand-down periods (waiting times before some parts of your cover start). If you replace your policy, these periods may start again — meaning you may not be covered for certain illnesses or conditions for a time. Make sure to check the details of any stand-down periods for the specifics covers (like Life and Trauma covers) before you make any changes.

Definitions.

The new policy might define things differently.
Insurance policies don’t always use the same definitions — especially when it comes to medical terms or serious illnesses. A condition that qualifies for a payout under your current policy may not meet the definition in a new one. It’s important to compare this carefully.

Cost.

It’s not always cheaper in the long run.
A new policy might seem cheaper today, but it could cost more over time — especially if premiums increase with age. You could also lose discounts you’ve built up on your existing policy (like multi-benefit or loyalty discounts).

Financial Strength Rating.

Make sure your new insurer is financially strong.
All insurers in New Zealand must be licensed, but not all have the same financial strength rating. This rating shows how likely an insurer is to be able to pay claims in the future. It’s worth checking the new insurer’s rating — especially if switching from a well-established company.

Tip: Don’t cancel your existing cover just yet.

Only cancel your current policy once the new one is approved, accepted, and fully in place. That way, you won’t be left without cover at any point.